Preamble

The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.

Bristol Corporation Bill,

Seaham Harbour Dock Bill,

As amended, considered; to be read the third time.

DE VESCI'S DIVORCE BILL [Lords],

Ordered, That a Message be sent to the Lords to request that their Lordships will be pleased to communicate to this House copies of the Minutes of Evidence and Proceedings, together with the Documents deposited, in the case of De Vesci's Divorce Bill [Lords].—[The Lord Advocate.]

Oral Answers to Questions — COAL PRODUCTION.

LOCAL SUPPLIES.

Major HENDERSON: 1.
asked the President of the Board of Trade whether
he is aware that the question of re-registration of coal consumers in Glasgow has been under consideration by the Board of Trade for the past six months; and whether he will state when it is proposed to come to a decision in the matter?

The PRESIDENT of the BOARD of TRADE (Sir R. Home): Yes, Sir. But, as stated in the reply given to the hon. and gallant Member on the 29th March, the question of decontrol of internal distribution is under consideration, and until this is settled it is not considered desirable to proceed further with re-registration. A decision on this matter will be made as soon as possible after consultation with the interests concerned.

Lieut. - Commander KENWORTHY: 2.
asked the President of the Board of Trade why the allocation of household coal to merchants in Hull is based on the amount supplied to coal merchants in the years 1917 and 1918; whether he is aware that this bears hardly on men in the coal trade who were fighting abroad during 1917 and 1918; and why the allocation cannot be made pro rata on the coal supplied to merchants in 1913 and 1914?

Sir R. HORNE: The supplies of household coal to merchants in Hull are based on the quantities supplied to the coal merchants in 1917, in accordance with the arrangements obtaining generally
throughout the country. When it became necessary to impose rationing in 1918, conditions were so abnormal that it was impossible to base supplies on 1913 quantities. The flow of coal had also been altered by the Transport Reorganisation Scheme, and it was necessary to maintain the flow in its new channels. It is not proposed to make any alteration at present, especially as steps are being taken which it is hoped will result in decontrol of household coal shortly.

Lieut. - Commander KENWORTHY: Will the right hon. Gentleman, without altering the whole basis of rationing, which I appreciate, see that men who were broad fighting during 1917 and have now come back and wish to set up in business receive some ration of coal?

Sir R. HORNE: Every effort is made to suit those cases of possible applicants for coal. I am hoping, as I have already said in answer to my hon. and gallant Friend's question, to have this matter dealt with on a new basis very shortly.

Mr. SITCH: 3.
asked the President of the Board of Trade if he is aware of the alarm and apprehension prevailing amongst responsible authorities in the Midland Division, owing to the fact that supplies under the Fuel and Lighting Order during the first 11 weeks of 1920 were less by 7,250 tons per week than during the corresponding period of 1919, when they were barely adequate for private and public needs; whether, as a result of this shortage, there are practically little or no reserves of fuel throughout the division, some towns having none at all; whether he is aware of the consequences that would ensue in the event of cessations of work on the part of those engaged in furnishing supplies; whether he is aware that 36,000 tons of household coal are diverted from the Midland producing area to other districts every week, much of it going to London; if he will say whether supplies to the Metropolis are now 12,000 tons per week above the quantity there delivered at the corresponding date last year; and whether he will order an immediate inquiry into the whole matter with a view of affording speedy relief by augmenting the supplies, and thereby removing any risk of jeopardy either to householders or business undertakings in the Midland Division concerned?

Sir R. HORNE: The supplies to the Midland Division have already engaged the special attention of the Coal Mines Department; 3,000 tons per week of industrial coal in the division has been diverted to household purposes, and a further 1,500 tons per week diverted from another area. In addition, all collieries are being pressed to maintain full supplies. The Staffordshire and Warwickshire coalfields have always contributed to the London supplies. The Metropolitan position, both as regards supplies and requirements, has been so difficult that additional coal has had to be found. This has not been diverted from the Midland producing area, but has been provided from the Northumberland and Durham coalfields and conveyed both by rail and sea.

Colonel BURN: 7.
asked the President of the Board of Trade if he is aware that some works in the North have been closed down owing to lack of coal, and will he forbid the export of any more coal until our own needs are supplied?

Sir R. HORNE: I am not aware of any works in the North having had to close as a result of the diversion of coal for export. Coal from the Northumberland and Durham area is being absorbed inland to the full extent to which it can be dealt with by railways and by coastwise shipping. Export is only permitted where either the coal is unsuitable for home use or where it cannot be transported to a destination in the United Kingdom.

Colonel BURN: Is the right hon. Gentleman aware that some of the gas companies have only one week's supply of coal in hand?

Sir R.HORNE: I regret to say that that is not an unusual condition for gas works in the United Kingdom, and I think that the cases in which my hon. and gallant Friend is interested are not more remarkable than others.

Mr. REMER: Is the right hon. Gentleman aware that several works are actually closed down owing to shortage of coal?

Sir R. HORNE: I am not aware that any have been closed down.

Captain TERRELL: Is the right hon. Gentleman aware that there is a great shortage of coal in Oxfordshire, and that several villages have not had a supply
for seven or eight weeks, and will he undertake to look into the question of the coal supply for Oxfordshire?

Sir R. HORNE: I will be very glad to get particulars of the cases to which my hon. and gallant Friend refers I am not aware of the condition which he describes.

Mr. W. THORNE: Is the right hon. Gentleman aware that very large number of letters about the shortage of coal and the closing down of works is sent to the Coal Controller, and do those letters come under the personal observation of the right hon. Gentleman?.

Sir R. HORNE: If all the letters sent to the Board of Trade were to come under my personal observation I should never be able to attend in this House.

Mr. THORNE: That shows the emergency of the case

Sir R. HORNE: The Coal Controller deals expeditiously with every application that comes before him.

Mr. HOUSTON: Is the right hon. Gentleman not aware that the export of coal is of vital importance to this country, and that the shortage of home consumption is due to the reduced output of the mines, and is he aware that the output last year was 20,000,000 tons less than the output of the year before the War, though the number of men employed is larger than in 1913?

Mr. HARTSHORN: Is it not a fact that we are consuming more coal inland to-day than we ever did at any period of our history?

Sir R. HORNE: Both hon. Members have raised very interesting questions which cannot be dealt with in replies to questions. It is perfectly true that a very large amount of coal is being consumed at home to-day owing to prosperity of trade. It is equally true that the more coal you have to export the more benefit you confer on the country, and it is obvious from both those facts that the more coal you produce the better the country finds itself.

Sir ARTHUR FELL: 10.
asked the President of the Board of Trade if he is aware that prior to the War the difference in the price of coal at Grimsby and Yarmouth was 5s. per ton, whilst at the present time the difference is 19s. per ton
on rail-borne coal, and to add to the difficulties of the Yarmouth fishing fleet the Coal Controller has issued an order compelling the fleet to use 50 per cent. of sea-borne coal, which increases the price to 28s. a ton in favour of Grimsby; and what steps he proposes to take to do away with this hardship, which must ruin Yarmouth as a trawling port if it continues?

Sir R. HORNE: The pre-War difference in the price of coal at Grimsby and Yarmouth is correctly stated at 5s. per ton. The present difference on rail-borne coal is not 19s., but 6s. 5d. The extra cost entailed by the use of sea-borne coal is approximately as stated by the hon. Member. The reduction in the quantity of rail-borne coal permitted to be supplied for use as bunkers by the Yarmouth fishing fleet was necessitated by the heavy unsatisfied demand upon the Midlands coalfield for household purposes. It was therefore necessary to supplement the bunker requirements of the ports by sea-borne coal. The hardship thereby occasioned to the port of Yarmouth is recognised, and the Coal Controller hopes shortly to be able to permit the resumption of rail-borne supplies with the expected summer slackening of the household demand.

Sir A. FELL: While this new arrangement with regard to coal is being made, will the right hon. Gentleman do something to get over the difficulty?

Sir R. HORNE: The difficulty is being borne in mind.

GAS UNDERTAKINGS.

Colonel BURN: 8.
asked the President of the Board of Trade if he is aware of the great hardship inflicted on towns that receive sea-borne coal and that have to pay considerably more for their gas and electric light owing to the increased cost of transit of the coal; and will he take steps to get the cost of coal delivered by sea in excess of that sent by rail divided amongst the various gas undertakings throughout the country?

Sir R. HORNE: I am aware that the cost of coal conveyed by sea for gas and electric light undertakings is in excess of that conveyed by rail. Owing, however, to the congestion on the railways, and to the difficulty in obtaining sufficient
wagons, it is not practicable to make any change at present. I am not prepared to take the steps indicated in the concluding portion of the question.

Colonel BURN: Does not the right hon. Gentleman consider it a great hardship that certain towns have to pay so much more for their gas owing to the price of coal, and if coal is carried at present by rail to Newton Abbot and delivered there why cannot it go on to Torquay, which is only five miles further on?

Sir R. HORNE: I am afraid that my hon. and gallant Friend does not entirely understand the question. He sympathises with the places that are situated on the sea, but they are obtaining the advantage at present of getting coal by rail, and consequently cheaper than in the old days when they had to get it all by sea.

Captain COOTE: Is the coastwise service not still subsidized?

Sir R. HORNE: Yes, it is.

GERMAN GOVERNMENT BONDS (BRITISH HOLDERS).

Mr. MANVILLE: 4.
asked the President of the Board of Trade whether authority will be given to the Controller of Enemy Debts at Cornwall House to disburse without any longer delay the money owing to British holders of due and unpaid interest coupons on British-owned German Government bonds, provided all requirements of the Controller as to proof of British ownership have been complied with?

Sir R. HORNE: I regret that I am unable to adopt my hon. Friend's suggestion. Under the procedure laid down by the Treaty of Peace, claims of the nature of those referred to in the question must first be submitted to the German clearing office, and on their admission payment will be made by the Controller to the creditors.

Mr. MANVILLE: Why is this system of the German clearing office required in connection with this question of German Government debts? Surely they have nothing to grumble at in the coupons?

Sir R. HORNE: The arrangements under the Treaty of Peace are that all
these cases have in the first instance to be submitted to the German clearing office.

MERCHANDISE MARKS.

Lieut. - Colonel ARCHER-SHEE: 6.
asked when the Committee on Merchandise Marks may be expected to report?

Sir R. HORNE: I understand from my hon. Friend the Member for the Wells Division of Somerset, who presides over the Merchandise Marks Committee, that the Committee have finished taking evidence and hope to complete their Report in about six weeks.

Lieut.-Colonel ARCHER-SHEE: Is the right hon. Gentleman aware that while this delay is taking place in legislation with regard to imports large numbers of German clocks and other German goods are being imported under false pretences, and a great number of manufacturers are giving up business, and cannot the matter be expedited in some way so that German goods can be marked as German?

Sir R. HORNE: I shall be glad to do everything in my power. I shall also be very glad if my hon. and gallant Friend will give me particulars of any cases of the kind to which he refers of which he is aware.

ENEMY MERCANTILE SHIPPING.

Lieut.-Colonel Sir F. HALL: 11.
asked what is the total tonnage of enemy mercantile shipping which has been taken over by Great Britain; what is the tonnage still held by the United States; and whether the Government have any information as to pending negotiations for the re-transfer by America to German interests of certain ships formerly under German control?

The PARLIAMENTARY SECRETARY to the MINISTRY of SHIPPING (Colonel L. Wilson): I have been asked to reply. In addition to prize and detained ships amounting to approximately 450,000 gross tons, Great Britain has been allotted 1,330,000 gross tons of enemy shipping for temporary management. With regard to the second part of the question, the United States have about 575,000 gross tons of ex-enemy shipping. As regards the third part of
the question, my attention has been called to paragraphs which have appeared in the Press, but I am not in a position to make any definite statement.

Sir F. HALL: Has the hon. and gallant Gentleman made any inquiries with regard to the last part of my question?

Colonel WILSON: I understand that there has been a discussion by the Committee of Commerce in the United States, and it has been decided by them that none of the vessels in question shall be sold unless and until specific instructions and authority has been given by Congress.

MOTOR VEHICLE INDUSTRY.

Mr. MANVILLE: 12.
asked the President of the Board of Trade whether he is aware that the two Scottish steel mills which principally supply the steel plates required for the manufacture of motor chassis frames are now controlled by a shipbuilding combine, which may utilise the products of these mills for the manufacture exclusively of plates required for shipbuilding; that the motor vehicle industry, which even at present is obtaining but much smaller quantities of these plates than is required, may be placed in the position of having to close many works with corresponding unemployment; and will he state what steps he proposes to take to prevent such a condition arising which would particularly affect Coventry, the workpeople of which depend so largely on the motor vehicle industry?

Sir R. HORNE: I am aware of the facts in the cases of the two concerns referred to in the first part of the question, and my attention has also been called to the adverse effect of a shortage of steel plates on the motor industry. I have been in communication with the National Federation of Iron and Steel Manufacturers on the subject, and have every reason to believe that the importance of an equitable distribution of the output of steel plates is fully recognised by the manufacturers.

Mr. MANVILLE: Will the right hon. Gentleman consider the question of rationing?

Sir R. HORNE: I should enter very reluctantly upon the question of rations. If I remember aright the attitude of all the manufacturers in the House, their
previous opinion has been directly against any form of Government control. What I find to-day is a recrudescence of the old idea of control and rationing on the part of people for all the things they consume, but always of decontrol of the things they produce.

PROFITEERING ACT (LAMP GLASSES).

Mr. DAWES: 13.
asked the President of the Board of Trade whether he is aware that on the 12th November, 1919, the Southwark Profiteering Committee referred to his Department an alleged case of profiteering in lamp glasses; that on the 10th April the Committee were informed that a preliminary investigation would be held on the 23rd April; whether he can give any explanation of this delay of over five months in dealing with the matter; and whether the investigation of such cases can be expedited?

Sir R. HORNE: I regret that owing to the very large number of cases which the Central Committee has been called upon to investigate, there has been some delay in dealing with this case. The delay was originally created by the fact that the complainant himself was not prepared to appear. The subsequent delay was occasioned by the fact that owing to other cases being brought to the Committee's attention, the Committee considered it desirable that a general inquiry into the costings of the particular trade should be undertaken before proceeding with the investigation of the individual case.

Oral Answers to Questions — TRANSPORT.

AGRICULTURAL SHOWS (LIVE STOCK).

Captain TERRELL: 14.
asked the Minister of Transport when he anticipates being able to provide facilities for the conveyance of livestock to the agricultural shows?

The MINISTER of TRANSPORT (Sir Eric Geddes): I am not aware that there is any special difficulty regarding the rail conveyance of live stock to agricultural shows.

Captain TERRELL: May I ask the right hon. Gentleman whether he has forgotten the promise he made at the last
General Election that he would supply an improved transport service for agricultural districts? When does he intend to do it?

Sir E. GEDDES: The service for agricultural districts has been steadily improving since the last General Election.

Captain TERRELL: Can you give me any evidence?

Sir E. GEDDES: I shall be glad to supply it to my hon. Friend.

Captain TERRELL: Thank you very much.

WAGONS (SHORTAGE).

Sir CECIL BECK: 15.
asked the Minister of Transport whether he can give some assurance as to the immediate pro vision of further railway trucks at the stations of Bishops Stortford, Stansted, Dunmow and Castle Hedingham; what steps is he taking to deal with the numerous complaints made to him from the districts served by these and neighbouring railway stations; whether he is aware that many hundreds of tons of hay and other produce have been lying on the farms in North Essex for several months, such produce having been sold to the traders but never delivered owing to lack of transport; and whether such a failure in the railway service greatly adds to the prices paid by the ultimate consumer?

Sir E. GEDDES: I am aware of a shortage of trucks at the stations named. It is aggravated by the fact that until recently loaded wagons with barley for malting were going into the station and thus provided empties. Special steps are being taken by the Great Eastern Railway to ameliorate the difficulty complained of.

LONDON OMNIBUS SERVICE.

Commander Viscount CURZON: 16.
asked the Minister of Transport whether the new omnibus stopping places are considered to be satisfactory; and, if so, whether they are to be permanent?

Sir E. GEDDES: It is assumed that the hon. and gallant Member refers to the experiment mentioned in paragraph 6 of the Report of the Advisory Committee on London Traffic. The results of this experiment are considered to be satisfactory by the Technical Sub-Committee dealing
with it. The Sub-Committee have in hand proposals for the continuance of the system and its extension to other routes.

Viscount CURZON: Is the right hon. Gentleman aware that numerous stopping-places for buses are exactly abreast of places of refuge in the streets?

Sir E. GEDDES: I was not aware of it, but I shall be glad to look into it.

Sir C. KINLOCH-COOKE: Will the right hon. Gentleman see that in cases where "stop by request " posts are put up, and buses are requested to stop, they do stop?

MOTOR VEHICLES (CENSUS).

Viscount CURZON: 17.
asked the Minister of Transport whether any steps are being taken to compile an up-to-date census of all motor vehicles of various categories in Great Britain?

Sir E. GEDDES: The answer is in the negative. I hope, however, that if and when the new proposals for the taxation of mechanically-propelled road vehicles come into force, a satisfactory system of registration of such vehicles will result therefrom.

Mr. PEMBERTON BILLING: Will this House have the opportunity of seeing the report in connection with this at an early date and before the Budget is passed?

Sir E. GEDDES: The report, I think, was published as a White Paper on the 13th.

RAILWAYS (RE-VALUATION).

Major BARNES: 18.
asked the Minister of Transport whether, in the event of an assessment committee determining that there must be a revaluation of the rate able hereditaments in their union, the Government will provide the necessary data for the revaluation of the railways in the same way as the railway companies would have done before the Government worked or controlled these undertakings?

Sir E. GEDDES: I have to draw the hon. and gallant Member's attention to the reply given to him by the Prime Minister, in answer to a question on the 8th March, when he stated that the Government is of opinion that, in view of the abnormal conditions which at present exist, any general revaluation is undesirable. The necessary data for a re-
valuation of the railways is not in the possession of the Government, nor is it within their powers to provide it.

ROAD VEHICLES (TAXATION).

Mr. ATKEY: 19.
asked the Minister of Transport whether he has now received the Interim Report of his Advisory Committee on the Taxation of Road Vehicles; and, if so, whether he will arrange to have it published forthwith?

Sir E. GEDDES: The Interim Report of the Departmental Committee on the Taxation of Road Vehicles was presented to the House of Commons on the 13th instant and copies of it can be obtained at the Vote Office.

GOODS TRAFFIC (HOUES OF WORK).

Colonel BURN: 23.
asked the Minister of Transport whether he is aware that the steel workers in the North of England have introduced three eight-hour shifts per day; and can steps be taken to adopt the same system as regards the mineral, metal, and goods traffic?

Sir E. GEDDES: I would refer the hon. and gallant Member to the reply on this subject given to the hon. Member for Middlesbrough West and the hon. and gallant Member for Henley on the 12th instant.

RAILWAY FARES.

Sir ARTHUR FELL: 24.
asked the Minister of Transport whether it is the fact that railway fares in this country in numerous cases remain the same as they were before the War; as the expenses of running trains have gone up in every case, if he will say why this is allowed to continue; and what steps he proposes to take to remedy it?

Sir E. GEDDES: Railway fares throughout the country have been increased generally by 50 per cent., though the increase has not extended to workmen's fares, and the principal exception is the case of the short distance fares on the London Electric Railways in regard to which there is a Bill before the House promoted by the proprietors.

RAILWAY TICKETS (CHILDREN).

Mr. GILBERT: 41.
asked the Minister of Transport whether he can issue an order to the railway companies to extend the age of children's half-price tickets from
12 to 14 years of age; and, if not, whether, in view of the increased cost of living to the working classes, he will ask the companies to favourably consider this two years' age extension on children's cheap tickets?

Sir E. GEDDES: I would refer the hon. Member to the answer given to a similar question put by the hon. Member for Barnard Castle (Mr. Swan) on the 15th instant.

RAILWAY POLICE.

Mr. GILBERT: 42.
asked the Minister of Transport whether the negotiating committee of railway general managers and the representatives of the railway police have yet met to consider the conditions of service; if not, whether it is proposed to fix an early date for that purpose in view of the discontent amongst the railway police whose conditions of service compare unfavourably with those of other police forces; and whether he has yet decided to apply the Desborough scale of pay to the railway police?

Sir E. GEDDES: The representatives of the railway police are now appointing a small committee to negotiate with the general managers, and so soon as this has been done, arrangements will be made for a meeting to consider the conditions of service, including the rates of pay of the men concerned.

SOUTH METROPOLITAN EXTENSION LINE.

Mr. GILBERT: 43.
asked the Minister of Transport whether the Advisory Committee on London Traffic has yet reported as to the re opening of the Victoria to City line on the South Eastern and Chat ham Railway: and, if not, whether he will press them to do so in view of the urgency for more traffic facilities in South London?

Sir E. GEDDES: The Technical Committee of the Advisory Committee have considered the matter, and are unable to recommend the re-opening of any of these stations. This report will be brought up for consideration at an early meeting of the Advisory Committee when it resumes its sittings.

Oral Answers to Questions — GERMANY.

RENEWAL OF BLOCKADE.

Lieut.-Commander KENWORTHY: 25.
asked the Prime Minister whether the
British chargé d'affaires in Berlin has informed the German Government that supplies of food and raw material will be prevented from entering Germany in the event of a Communist Government being set up; and whether we are prepared to bring similar pressure to bear to prevent the restoration of the Hohenzollerns or the setting up of a military dictatorship in Germany?

Mr. BONAR LAW (Leader of the House): The actual terms of the statement made by the chargé d'affaires were that such possibility as might exist of help being afforded by way of foodstuffs, raw materials or credits could be destroyed by violent action from any quarter.

Lieut. - Commander KENWORTHY: Why was it not made at the time of the Kapp-Luttwitz camp? Why did we wait until several days after that had been demolished?

Mr. BONAR LAW: As the House knows, it is not usual to make any statement of this kind. It is made now because there were rumours that another ministry was to be formed.

OCCUPIED ZONE (GERMAN TROOPS).

Lieut.-Commander KENWORTHY: 26.
asked the Prime Minister whether a body of about a thousand German Reichswehr troops, under the Command of General von Gillhausen, was driven into the British Occupied Zone during the Kapp-Luttwitz Revolution; whether these troops were supporting the constitutional Government or the Kapp-Luttwitz movement; whether they have been released; if so, whether they were first deprived of their arms; whether they have been allowed to enter the Ruhr Valley Zone; and what is our policy towards German troops retreating into the Occupied Zone?

Mr. BONAR LAW: I understand this question is to be answered by the War Office.

MR. CHURCHILL has furnished the following reply:—

A body of about 1,500 German Reichswehr troops, under General von Gillhausen—which were supporting the constitutional government, were driven by the Red Forces into the British occupied territory on the 19th March.

They were disarmed and interned, and have now been repatriated to unoccupied Germany without their arms.

The policy as regards treatment of German troops which enter the British occupied territory is first to disarm and temporarly intern all such troops and subsequently to repatriate them without their arms to an undisturbed part of unoccupied Germany, under arrangements made with the German Authorities.

WAR CRIMINALS (TRIAL).

Mr. G. DOYLE: 29.
asked the Prime Minister what progress, if any, has been made during the last three months in bringing the ex-Kaiser and other War criminals to justice; if the refusal of the Netherlands Government to surrender the first-named has been accepted by the Supreme Council as final; if the said Government have promised to take effective measures against his escape and conspiring with persons from Germany to promote unrest in that country; and if the Netherlands Government have given any undertaking that they will intern the ex-Kaiser in one of their Colonies under an effective guard?

Mr. BONAR LAW: As the House is aware, the surrender of the ex-Emperor under Article 227 of the Treaty of Versailles has, during the last three months, been the subject of an exchange of Notes between the Supreme Council of the Allies and the Netherlands Government. The Netherlands Government have not been able to see their way to comply with the request of the Allied Governments in this matter. They have, however, undertaken full responsibility for the safe custody of the person of the ex-Emperor and the control of his correspondence and relations with the outside world. For this purpose they have assigned him a place of residence within a specified portion of the Province of Utrecht.

Mr. DOYLE: Can the right hon. Gentleman say where the ex-Kaiser is at present?

Mr. BONAR LAW: In some part of the Province of Utrecht.

Colonel LOWTHER: Could not the Dutch Government send him to the Isle of Cayenne, and will a recommendation to that effect be made to that Government?

Lieut. - Commander KENWORTHY: May I ask why it was that during the War we were able to bring successful pressure on the Dutch Government with regard to imports, and now we are apparently helpless in view of this great danger to Europe?

Mr. BILLING: May I ask whether from the answer of the right hon. Gentleman we are to understand that the Allies have given up all hope of fulfilling the Prime Minister's election pledge that the ex-Kaiser would be brought to trial?

Mr. BONAR LAW: All the facts are well known to the House.

Lieut. - Commander KENWORTHY: No; they are not.

Mr. BONAR LAW: The Allies have done their best to induce the Government to take action. They have not succeeded, and they do not propose to use force.

Mr. BILLING: If the whole of the Allied Powers cannot insist on the Dutch Government doing this, what possible hope is there for the League of Nations?

Mr. BONAR LAW: The League of Nations does not propose in the first instance, or except as a last resort, to use force. The alternative for the Allies in this case is to use force.

Mr. BILLING: Would not an economic boycott have the same effect?

Colonel LOWTHER: Are we to understand if an arch-criminal takes refuge in Holland it is not proposed to use force?

Mr. BONAR LAW: That does not arise.

Sir F. HALL: 40.
asked the Prime Minister if he can give the House any information with regard to the progress which has been made with the arrangements for the trial of war criminals in Germany; if he will state when the trials are to take place; and whether an official shorthand writer will be present on behalf of Great Britain, whose soldiers and prisoners in Germany suffered most from German barbarism.

Mr. BONAR LAW: I can add nothing to the statement which the Prime Minister made in the House of Commons on this subject on 29th March last.

Sir F. HALL: Is the right hon. Gentleman aware that we have had no official information from the Government at all on this subject as to what is going to be done, and that we only know what we have to gather from the papers, and can he under the circumstances give a fuller reply to my question?

Mr. BONAR LAW: The statement made by the Prime Minister was that negotiations were going on, and that arrangements had not yet been completed.

Sir F. HALL: Will they be completed, or have they been completed, or are they likely to be completed very soon?

Mr. BONAR LAW: I can express a hope as regards the last.

Mr. DOYLE: If these War criminals succeed in escaping to Holland, as the ex-Kaiser has, and if Holland on application refuses to give them up

Mr. SPEAKER: That is a doubly hypothetical question.

Colonel LOWTHER: Is the right hon. Gentleman aware of the strong feeling there is all over the country on this subject?

Viscount CURZON: Are there any officers on the black list at present under detention in this country?

Mr. BONAR LAW: I should like notice of that question.

Mr. BILLING: Will the right hon. Gentleman give an undertaking to this House that the Government will insist on Germany producing the criminals named, having regard to their possible escape, and will he give them a time limit to commence their trial and put them under arrest in the meantime?

Mr. BONAR LAW: The subject has been very fully discussed, and I can add nothing.

MR. VOIGT (ARREST).

Sir F. HALL: 52.
asked the Under-Secretary of State for Foreign Affairs if, in the note addressed to the German Government with regard to the arrest of and assault upon a British journalist, Mr. Voigt, at Essen, a demand was made for the punishment of the Prussian officer responsible for these acts; and if the text of the
notes on the subject which have passed between the two Governments will be published?

The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Mr. Harms-worth): I must ask my hon. and gallant Friend to be good enough to refer to an answer which I gave in the House to a similar question addressed to me on this subject on April 14th, and to which I have nothing to add.

Sir F. HALL: Does the hon. Member recognise the fact that the last part of the question was not asked previously, and can he give me a reply on that point?

Mr. HARMSWORTH: I will consider that.

Sir F. HALL: But does not my hon. Friend recognise the necessity, at all events, of protecting the people of this country against these Prussians?

Oral Answers to Questions — IRELAND.

GUN-RUNNING (ALLEGED)

Viscount CURZON: 27.
asked the Prime Minister whether any cases have recently occurred of attempted gun-running into Ireland; and, if so, whether any particulars can be given?

Mr. BONAR LAW: There have been numerous rumours recently regarding the illegal landing of arms, and no doubt small arms are being surreptitiously smuggled into Ireland as occasion offers, but nothing is known of any recent attempt at gun-running in this country.

Viscount CURZON: May we take it that there is no truth in the statement with regard to the two ships detained in the Forth?

Mr. BONAR LAW: A question is down on that subject, and I understand the Admiralty will answer it.

STATE of COUNTRY (GENERAL REPORT)

Lord ROBERT CECIL: 36.
asked the Prime Minister whether he will cause a Report or Reports to be forthwith presented to this House describing the actual state of things in Ireland, including particularly the extent to which the machinery of government is paralysed there?

Mr. BONAR LAW: I am communicating the suggestion of my Noble Friend to the Irish Government, but I hardly think that a general Report, such as is asked for, could be usefully given.

Lord R. CECIL: May I ask the right hon. Gentleman whether he does not think it is really of very great importance to bring before the people of this country in an authoritive way the real condition which apparently prevails in Ireland?

Mr. BONAR LAW: Yes, I think there is some advantage in that, and, as I have said, I have communicated the suggestion in the question to the Irish Government.

Sir W. DAVISON: Is the right hon. Gentleman not aware that the administration of the ordinary law has entirely ceased in the South and West of Ireland, and its place is being taken by self-constituted Sinn Fein Courts?

Mr. SPEAKER: The hon. Gentleman should put that question on the Paper.

MOUNTJOY PRISON (RELEASE OF PRISONERS).

Lord ROBERT CECIL: (by Private Notice) asked the Prime Minister what conditions, if any, were made at the release of prisoners from Mountjoy Prison; whether the prisoners gave any under taking and, if so, what were its terms, and whether it was in writing or orally; whether the prisoners went into hospital or to their own homes, and whether they are now under police guard or supervision?

Mr. BONAR LAW: Before any prisoner was released the following statement was read to each, and was not objected to:
You are being released on parole to return to this prison on [the date is specified in each case,] and we trust to your honour to do so.
The majority of the prisoners went to hospital, a few to their own homes. The police are aware where each prisoner is.
The Irish Executive does not anticipate that the parole of any prisoner will be broken. Past experience goes to show that this conclusion is justifiable.

Mr. CLYNES: May I ask, if the Government can take steps to recognise the honour of these men, and trust to their recognising such a statement as was read to them, whether it is reasonable to treat them as criminals?

Mr. BONAR LAW: I do not see the relevancy of that question, for this reason—amongst others—that they have not given, and I do not suppose would give, their parole to abstain from action on account of which they were imprisoned.

DISTURBANCE, MILLTOWN MALBAY.

Mr. T. P. O'CONNOR: (by Private Notice) asked the Attorney-General for Ireland if he can make to the House a statement with regard to the unfortunate events in Milltown Malbay, where three people were killed and several were wounded by the soldiers and, I believe, by the police 1 [HON. MEMBERS:" No !"]

The ATTORNEY-GENERAL for IRELAND (Mr. Denis Henry): On the night of the 14th instant a patrol, consisting of six constables of the Royal Irish Constabulary and seven soldiers, was fired on by a crowd consisting of about 250 persons. The military returned the fire, with the result that three men in the crowd lost their lives and a number were wounded.

Mr. O'CONNOR: May I ask the right hon. and learned Gentleman whether the origin of this unfortunate happening was that as a body of the people in Milltown Malbay were celebrating the wisdom of the Government in liberating the prisoners on hunger strike, and were themselves gathering for a peaceful and a perfectly laudable purpose, they were interfered with by this body of soldiers and police before any other incident occurred, and whether it is desirable in a case of popular demonstration of this kind that the police and soldiers should not abstain from any interference unless there is a clear case of an attempt to violate the law?

Mr. HENRY: No, Sir; my information is that the first act of violence proceeded from the crowd, and the firing was merely the result of a discharge of firearms by members of that crowd.

Mr. O'CONNOR: Was not the firing which is alleged on the part of the crowd subsequent to an attempt on the part of the soldiers and police to break up this meeting?

Mr. HENRY: No Sir; that is not my information.

Mr. PALMER: Is it only the Sinn Feiners who are to be allowed to fire?

Mr. O'CONNOR: I beg to give notice that I shall raise this subject again on the Motion for the adjournment.

Oral Answers to Questions — RUSSIA.

SOVIET GOVERNMENT (PROPAGANDA).

Mr. DOYLE: 28.
asked the Prime Minister whether he has received any information regarding the conscription of labour in Russia by the Soviet Government and the approval of it by the organ of extreme opinions in this country; what action he is prepared to take in order to demonstrate to the working classes the threatened attack on their individual and collective liberty; and if the Government will keep the people fully informed by means of pamphlets, etc, as to the progress of the Soviet conscription of labour?

Mr. BONAR LAW: My attention has been called to various messages issued from Moscow on the subject of the " labour armies" now organised in Russia, and I am surprised to learn that certain organs in this country have expressed their approval of the system which amounts to enforced labour. With regard to the second and third parts of the question, I hardly think that any Government action is necessary to demonstrate to the British public the undesirability of introducing a similar system into this country.

Mr. DOYLE: Is the right hon. Gentleman aware that there is consistent and persistent agitation and propaganda being carried on in this country at the present time for the purpose of establishing in this country a system similar to that of the Soviet Government in Russia, where industrial conscription prevails?

Mr. BONAR LAW: I am aware generally of what has been said by my hon. Friend, but I would rather welcome any encouragement of knowledge of that

Mr. W. THORNE: Does the right hon. Gentleman not think it would be a very good thing to make all the idlers in this country work?

CIVILIANS (REPATRIATION).

Colonel WEDGWOOD: 46.
asked the Under-Secretary of State for Foreign Affairs whether His Majesty's Govern-
ment has yet repatriated all Russian civilians in the British Empire, or any territory where His Majesty's Government exercises direct authority, who are willing to return to Russia, under the exchange of prisoners agreement; and, if not, how many have been repatriated?

Mr. HARMSWORTH: His Majesty's Government expressed their willingness to repatriate all Russians in the United Kingdom who were willing to return to Russia, and have afforded facilities for Russians to proceed from Denmark and Switzerland to their own country. As regards Russian civilians in this country, none have so far been repatriated owing to the fact that the Soviet Government has expressed the wish to limit the number of persons to be repatriated to 125, and insists on their being selected by an organisation called " The Russian Delegates Committee." His Majesty's Government do not see their way to agree to such conditions.

Lieut. - Commander KENWORTHY: Has the hon. Gentleman any information about Russian civilians in other parts of the British Empire besides this country?

Mr. HARMSWORTH: No, except that His Majesty's Government expressed their willingness to return all Russian civilians so far as they could.

ANATOLIA.

Sir J. D. REES: 30.
asked the Prime Minister whether the Government has official information to the effect that the Ottoman Government has disavowed the Nationalist movement and the action of the Nationalist party in Anatolia, and that the Sheikh-ul-Islam has issued a proclamation to the same effect; and whether such outrages as have occurred have been caused by or with the express or implied approval of the Nationalist party?

Mr. BONAR LAW: The Imperial Decree appointing the new Grand Vizier, who took office on 5th April, condemned the Nationalist movement in outspoken terms as a rebellion which had gravely damaged the interests of Turkey and might still further endanger them. A further proclamation issued on the 10th April in similar terms gave the rank and file one week in which to submit to the
Sultan, and threatened with condign punishment the leaders of the Nationalist movement and any Moslems guilty of excesses against Christians, and vice versa. Similar decrees have also been published by the Sheikh-ul-Islam. There is little doubt that the outrages which occurred were caused by, or at least had the approval of, the Nationalist party.

Sir J. D. REES: In view of the fact that these outrages are attributed to the deliberate action of the Turkish Government, should not stress be laid upon this repudiation from official sources?

Mr. BONAR LAW: I think it is desirable, and I hope the answer to this question will help in that direction.

ARRESTED SHIPS, GRANGEMOUTH.

Major GLYN: 31.
asked the Prime Minister whether two steamers, the one a German and the other a Russian, are at present under arrest off Grangemouth, Firth of Forth; whether their cargo consists of a small quantity of coal and a large quantity of small-arm and artillery ammunition; whether these ships were passed by the Customs authorities in the Downs as having loaded at a Continental port to proceed to Esthonia; and if he can state what are the facts as now known to the Government and what action it is proposed to take?

The PARLIAMENTARY SECRETARY to the ADMIRALTY (Colonel Sir James Craig): I have been asked to reply to this question. The answer to the first two points is in the affirmative. As regards No. 3, the s.s. "Algieba" called at the Downs, but was diverted by the owners to the Firth of Forth. The ships' cargoes were reported as destined for South Russia. H.M. Customs did not examine nor pass the vessels. As regards Nos. 4 and 5, the "Algieba" is transferring her cargo to "Olga" and will then be free. In view of the changed situation in South Russia, the disposal of "Olga's "cargo is under consideration.

POLICE PENSIONERS(CABINET COMMITTEE).

Colonel Sir J. REMNANT: 32.
asked the Prime Minister if he is now in a position
to say what decision he has arrived at with a view to increasing the pensions granted to the police prior to 1st April, 1919?

Sir C. KINLOCH-COOKE: 35.
asked the Prime Minister whether he is now in a position to give the House any further information regarding the progress of the Special Committee set up by the Cabinet to inquire into necessitous cases amongst pre-War pensioners?

Mr. BONAR LAW: I am sorry that I can as yet add nothing to the answer given on Wednesday last to the hon. Member for Kettering.

Sir J. REMNANT: In view of the greatly increased cost of living and consequent distress to those poor old pensioners, if I put down a question for next Monday, will the right hon. Gentleman be then able to give a definite answer on this matter?

Mr. BONAR LAW: I communicated with the Chairman of the Committee and I am afraid it would not be possible to give an answer as soon as that.

Sir J. REMNANT: If I put it down for the following Monday?

Mr. BONAR LAW: We shall do our best.

Sir E. CARSON: May I asked if these inquiries also include the promises that were given to the Royal Irish Constabulary pensioners?

Mr. BONAR LAW: I think so.

Mr. BILLING: Having regard to the opinion of this House, as expressed when it had the opportunity of doing so, may I ask whether the right hon. Gentleman will give the House an opportunity of expressing an opinion on the whole question of pre-War pensioners?

Mr. BONAR LAW: I am quite aware of the feeling of the House but I think the House will also recognise the difficulty of it and that it is quite right to give us a reasonable time.

Sir C. KINLOCH-COOKE: Can the right hon. Gentleman give us the name of the Chairman of this Committee?

Mr. BONAR LAW: He is a member of the Cabinet and it is not usual to give the individual name.

GOVERNMENT EMPLOYMENT (MEDICAL EXAMINATION).

Mr. CROOKS: 33.
asked the Prime Minister whether, in view of the physical deterioration consequent upon the experiences during the War, instructions will be given to discontinue the practice of medically examining the applicants for employment under the various Government Departments?

The FINANCIAL SECRETARY to the TREASURY (Mr. Baldwin): The Order in Council of 22nd March, 1918, adopted the recommendations of Viscount Gladstone's Committee (Cmd. 34) in regard to the conditions under which Civil Service certificates for permanent appointment should be issued to candidates whose health has been impaired by War service, and gave power to relax to a very great extent the ordinary physical standard for certification. The power of relaxation has been largely used, and I think it will be generally agreed that these concessions go as far as can reasonably be expected.

OIL INDUSTRY.

Sir J. D. REES: 34.
asked the Prime Minister if he will state which Minister now performs, in respect of the oil industry and of questions relating to oil, the functions recently discharged by the Chief Secretary to the Lord Lieutenant of Ireland?

Mr. BONAR LAW: It is intended that the duties in this respect performed by the Chief Secretary while he was head of the Department of Overseas Trade will be undertaken by his successor.

Oral Answers to Questions — EX-SERVICE MEN.

RESETTLEMENT.

Captain LOSEBY: 37
asked the Prime Minister (1) if he is aware that there is considerable uneasiness amongst ex-service men employed in the Ministry of Munitions owing to the changes pending; if, in view of the general importance of rehabilitating ex-service men, he can hold out any hope that any considerable portion will be absorbed in the permanent Civil Service;
(2) if he is aware that ex-service men are still experiencing difficulty in obtain-
ing rehabilitation, and that throughout the country their position is prejudiced by the fact that men of the same age who did not serve have captured and consolidated the main positions of tactical advantage in the professional world; and if, in view of these difficulties, he will consider the advisability of limiting the present system of competitive examinations for the Civil Service until such time as ex-service men competent to fill these vacant positions have been absorbed?

Mr. BALDWIN: The uneasiness to which the hon. and gallant Member refers must exist among all temporary staff of the Ministry, whether ex-Service or not. It was made clear, however, to each officer on his engagement that the position to which he was appointed was purely temporary. Whilst the utmost has been done to retain ex-Service men in the Ministry's employment, my right hon. Friend the Chancellor of the Exchequer cannot hold out any hope that those remaining in the employment of the Ministry can, for that reason alone, be transferred to permanent positions in the Civil Service. The Government is alive to the necessity of assisting in every way possible the rehabilitation of ex-Service men, and special arrangements have been made to increase the employment of such men in Government Departments. Consideration is now being given to the possibility of reserving vacancies in the permanent clerical grades, for a period, for competition among persons serving temporarily in Government Departments, the major portion of such vacancies for men being reserved for candidates who have served with the Forces, provided a sufficient number reach the qualifying standard

Captain LOSEBY: I would like to ask the hon. Gentleman if he is aware that speaking generally ex-Service men hold temporary and low-paid posts in the Civil Service, and that they have the mortification of seeing these permanent and more highly-paid posts in many cases held by men of the same age who did not serve during the War?

Mr. MILLS: Is it not a fact that every man retained in civil employment at home was deemed to be kept at home because he was of more use there than in the Forces?

DEPUTATION TO PRIME MINISTER.

Mr. W. THORNE: 39.
asked the Prime Minister if he is aware that a number of the branches of the National Federation of Discharged and Demobilised Sailors and Soldiers have carefully considered the reply to the deputation on 6th February, and record with dissatisfaction the result, and are of opinion that the discontent still existing can only be remedied by the prompt action of all branches in pressing their claim with greater determination: that they declare their firm intention of having nothing to do with the new Territorial Force; and will in no way support a Government unwilling to meet its obligations and which has failed to fulfil its pledges; and if he will take action in the matter?

Mr. BONAR LAW: I am aware that resolutions expressing the views set out in the question have been adopted by some branches of the Federation, but I am reluctant to believe that members of the Federation will not join with other ex-Service men in giving support to the Territorial Force

Mr. HOGGE: Is my right hon. Friend aware that the Federation of Discharged Sailors and Soldiers met the Prime Minister, and the Prime Minister admitted the justice of their claims, but said that the nation could not afford them, and in view of the fact that the nation cannot afford to discharge their debts to the discharged men, will the Government abrogate the interest that is paid on the money lent to the State for the War while these men are unrewarded for the services they rendered?

Mr. BONAR LAW: I am aware that the Prime Minister met the body referred to, but I do not accept the hon. Member's account of it as a correct statement of what he said. He did recognise the justice of the claims of these men, but I think the House will feel, as the Government does, that we have done everything in our power to meet them.

Mr. HOGGE: Does the right hon. Gentleman say that the Prime Minister did not say that the only reason he could not meet them was that the nation could not afford it?

Mr. BONAR LAW: I cannot remember the exact words used by the Prime Min-
ister, but I am convinced that in substance he said what I stated just now.

Oral Answers to Questions — PALESTINE.

POSITION OF JEWS.

Captain R. TERRELL: 44.
asked the Under-Secretary of State for Foreign Affairs if he will define the exact policy of the Government with respect to the future position of the Jews in Palestine?

Mr. HARMSWORTH: The policy of His Majesty's Government remains as defined in the Balfour Declaration of the 2nd November, 1917.

Lord R. CECIL: May I ask the hon. Gentleman whether it is still quite clear that the British Government will be ready to accept a mandate for Palestine?

Mr. HARMSWORTH: I should prefer to have notice of that question.

ARAB CLAIMS.

Mr. DOYLE: 48.
asked the Under-Secretary of State for Foreign Affairs whether the claims of the Arab nation to the sovereignty of Palestine is resented by the Jewish population, and was largely the cause of the recent riots in Jerusalem; and, in view of the British protectorate of that country, what steps, if any, are being taken to adjust the racial difficulties?

Mr. HARMSWORTH: I cannot say whether the facts are as suggested by the hon. Member, though there can be little doubt that the recent disturbances were caused by racial feeling. Palestine is not a British protectorate, but in British military occupation. The military authorities will take all possible steps to prevent any recurrence of similar incidents, and to allay racial feeling pending the final settlement of the future of the country by the Peace Conference.

FOREIGN OFFICE (INTERPRETERS).

Sir J. D. REES: 45.
asked the Under-Secretary for Foreign Affairs whether the system of qualification of interpreters in foreign languages followed in the Foreign Office is correlated with, or tested by,
comparison with that in force in the Army, Navy, and Indian Civil Service; and whether the examinations passed by the members of the diplomatic service in various languages are of equal, inferior, or superior severity as compared with those held by the Civil Service Commissioners?

Mr. HARMSWORTH: The answer to the first part of the question is in the negative; it would be impossible to answer the second part without very detailed and laborious enquiries, as the examinations passed by members of the Diplomatic Service, in order to qualify them for the allowances referred to in my answer to the question which my hon. Friend addressed to me on 31st March, are all conducted locally, under the supervision of a competent expert in the language of the country in which the examination takes place.

Sir J. D. REES: Without asking my hon. Friend for any enquiry at all, may I ask whether it is to be understood that these tests for the Foreign Office hold good and are recognised outside diplomatic circles?

Mr. HARMSWORTH: I have always understood they are the highest possible tests.

PASSPORTS.

Lieut. - Colonel W. GUINNESS: 47.
asked the Under Secretary of State for Foreign Affairs if he will state how many bureaux de control or passport offices now exist; how many officials are employed; what revenue is received from fees; and what is the total cost.

Mr. HARMSWORTH: There are twenty Passport Control Offices and five Sub-Passport Control Offices. All salaried British Consular Officers also are authorised to grant visas to persons wishing to enter British territory. One hundred and twenty-seven persons are employed in this service. The revenue received from fees is approximately £6,700 a month. The expenditure for the first three months of the year was at the average rate of £5,461 a month.

Lieut.-Colonel GUINNESS: Is it not a fact that the present system, though it is a great inconvenience and expense to the travelling public, is really no effective prevention of undesirable immigration, and
will the hon. Gentleman take steps to represent to foreign countries that this system may be amended or relaxed?

Mr. HARMSWORTH: My information is quite otherwise, but I will make inquiries.

Lieut.-Colonel Sir S. HOARE: Do the hon. Gentleman's figures include the many officers under the War Office who engage in this work?

Mr. HARMSWORTH: I think so, but I should not like to answer that offhand.

Lieut.-Colonel MURRAY: May I ask whether the Government have not totally disregarded the feeling of this House expressed in Debate a short time ago?

Mr. HARMSWORTH: In what respect?

Lieut.-Colonel MURRAY: In respect of the abolition of the visas.

Sir S. HOARE: As there is a good deal of feeling on this subject, will the hon. Gentleman appoint a small Committee to inquire into the whole question, and see whether great reductions might not be made in this service?

Mr. HARMSWORTH: I will certainly make representations to that effect.

MEMBERS' SEATS.

Mr. BILLING: May I ask your guidance on a point of order, Mr. Speaker? If every seat in the House is taken, should I be in order in sitting on the front Opposition bench? During the whole of Questions not three of these seats are taken, none of them are reserved, and that is the only bench that is never used at Question time?

Mr. SPEAKER: There is plenty of room upstairs

Mr. BILLING: Do I understand from your ruling, Sir, that I shall be permitted to ask questions from the gallery?

Mr. SPEAKER: The hon. Member knows as well as I do that those seats are within the House.

[The hon. Member took a seat in one of the side galleries reserved for Members.]

HUNGARY (DISORDERS)

Lieut.-Colonel ARTHUR MURRAY: 49.
asked the Under-Secretary of State for Foreign Affairs whether his attention has been drawn to statements concerning the terroristic situation alleged to be existing in Hungary; and whether His Majesty's Government have made any inquiries of their representative in Budapest as to the accuracy of these allegations?

Mr. HARMSWORTH: The answer to both parts of the question is in the affirmative. As soon as reports were received as to excesses against certain elements of the Hungarian population, Mr. Hohler, the representative of His Majesty's Government at Budapest, was asked to make inquiries. The reports which he has supplied, after personal investigation and consultation with his colleagues among the Allies, show that though in the first weeks after the fall of the Bolshevik Government there were many reprisals against sympathisers with the Bolshevik regimé, the Hungarian Government was in no way concerned in these. It is, in fact, doing everything it can do to repress disorders of all kinds, and its efforts seem to be meeting with considerable success, despite the desperate economic situation of the country. The number of murders committed since the first reprisals is estimated as something less than thirty. The Hungarian Government have declared their willingness to give every facility for an international inquiry into the matter. At Mr. Hohler's request an official of the Red Cross has already inspected certain of the chief prisons, and has reported that he found them in perfect order. The question whether effect can be given to a more extensive investigation is now under the consideration of His Majesty's Government.

POLAND (JEWISH MASSACRES)

Mr. WILLIAM SHAW: 50.
asked the Under-Secretary of State for Foreign Affairs whether the Report of Sir Stuart Samuel's Commission to inquire into Jewish massacres in Poland has yet been received; and, if so, when will it be made available to the House?

Mr. HARMSWORTH: The Report has been received. It is now being printed, and it is hoped that it will be available shortly.

LEAGUE OF NATIONS.

Mr. LUNN: 51.
asked the Under-Secretary of State for Foreign Affairs whether any invitation has been issued by the League of Nations Council to Germany to accept the obligations of membership in the League for the purposes of the dispute between Germany and France at the present time, in accordance with Article 17 of the League of Nations Covenant?

Mr. HARMSWORTH: The answer is in the negative.

Oral Answers to Questions — FOOD SUPPLIES.

WHEAT.

Lieut.-Colonel GUINNESS: 54.
asked the Parliamentary Secretary to the Ministry of Agriculture whether London millers are allowed to recover from the public the cost of carriage on country wheat which they bring to London, while if the country millers make the wheat into flour and send it to London they have to pay carriage; whether farmers are for this reason unable to obtain offals from country mills; and whether, with a view to the encouraging of pig-keeping, he will either cancel the payment of carriage in the one case or allow it in both?

Mr. PARKER (Lord of the Treasury): I have been asked to reply. All mills manufacturing flour in the United Kingdom are controlled by the State. London millers are allowed to charge in their accounts the cost of carriage of homegrown wheat to their mills, and country millers who make home-grown wheat into flour, and who, prior to control sold such flour to London buyers, are permitted to charge carriage on the flour up to a maximum of 16s. per ton. In less than 5 per cent. of the cases where country millers avail themselves of this permission does the actual cost of carriage exceed this figure. It would not appear, therefore, that there is any appreciable connection between carriage charges on wheat or flour and the output of offals from country mills, and the last part of the question does not arise.

Mr. CAUTLEY: 57.
asked the Parliamentary Secretary to the Ministry of Agriculture by what method is the price of 95s. a quarter for wheat to be secured to the grower in case the market price of imported wheat falls below 95s.?

The PARLIAMENTARY SECRETARY to the MINISTRY OF AGRICULTURE (Sir Arthur Boscawen): My hon. and learned Friend's question seems to be based on a misapprehension. The announcement made by the Prime Minister on 12th March did not promise a fixed price of 95s. a quarter for home grown wheat, but an equivalent price to that paid for imported wheat of similar or comparable quality subject to a maximum of 95s. If, therefore, the c.i.f. cost of imported wheat falls below 95s., the price paid for home-grown wheat will be reduced accordingly.

Captain R. TERRELL: 61.
asked the Parliamentary Secretary to the Ministry of Agriculture if he will define the term" of similar or comparable quality, used in the Government's recent statement on 1920 wheat prices and whether any assurance will exist that fair average quality English wheat will secure the maximum price of 95s. if the c.i.f. price of imported wheat is not under that figure?

Sir A. BOSCAWEN: I propose to take the opportunity afforded by my hon. and gallant Friend's question to state precisely the method by which the price to be paid for home-grown wheat harvested in 1920 will be ascertained.
The price to be paid for British wheat of sound milling quality will be announced each month, and will be the average of the c.i.f. cost of all milling wheat imported during the two preceding months, and of the actual and anticipated arrivals in the United Kingdom during the current month, subject to an adjustment in respect of the lower percentage of flour of equal water content obtainable from home-grown wheat as compared with imported wheat, and subject also to a maximum of 95s. a quarter.
Home-grown wheat of sound milling quality will be defined as wheat of fair average quality for the season fit for milling into flour for human consumption.
In reply to the specific inquiries in the question, the term "similar or comparable quality" refers to the percentage of flour obtainable, and the prices will be adjusted accordingly. Consequently, in view of the fact that British wheat yields on the average a somewhat lower percentage of flour of equal water content than imported wheat, the maximum price-
of 95s. will be payable for British wheat so long as the average price of imported wheat is in excess of that figure.

MILK (ADULTERATION).

Lieut.-Colonel PINKHAM: 62.
asked the Parliamentary Secretary to the Ministry of Agriculture whether representations have repeatedly been made by local authorities responsible for the administration of the Sale of Food and Drugs Acts, pointing out that the present state of the Law does not permit of the punishment of persons guilty of adulteration of milk where they are able, as they are in the majority of cases, successfully to plead a warranty under Section 25 of the Sale of Food and Drugs Act, 1875, and Section 20 of the Sale of Food and Drugs Act, 1899; whether such representations have urged that the warranty defence should be abolished and the retailer made liable for the penalties imposed by the Acts in all cases of adulteration, leaving such retailer to his remedy at Common Law against the person from whom he obtained his supply; and, if he will say whether he contemplates introducing amending legislation at an early date on the lines indicated in such representations?

Commander EYRES - MONSELL (Treasurer of the Household): Representations have been made as to the effect of the warranty defence provisions of the Sale of Food and Drugs Acts in the case of milk, some of them on the lines suggested in the question. The hon. and gallant Member will be aware that those provisions have already been amended by the Milk and Dairies (Consolidation) Act of 1915. That Act was suspended during the War and it is proposed to introduce legislation to amend it in certain particulars before bringing it into operation.

DOCK WORKERS (IRISH PORTS).

Major O'NEILL: (by Private Notice) asked the Food Controller whether it is the case that the dock workers at Irish ports are refusing to load any pigs or pig-products for export to Great Britain; whether this action is intended as a protest against the enormous increase in the price of home-cured bacon since control was removed; and what action he proposes to take in view of the state of affairs which has arisen?

Mr. PARKER: The facts are as stated in the question. The matter is engaging the attention of the Government.

Major O'NEILL: Are these men still refusing to handle the bacon?

Mr. PARKER: I am afraid I am not in possession of any further information.

Mr. J. JONES: Why should these men help to export food to other countries when they are going short themselves?

LAND SETTLEMENT.

Captain COOTE: 55.
asked the Parliamentary Secretary to the Ministry of Agriculture what is the total number of men settled on the land under the Land Settlement Facilities Act, 1919; the total acreage acquired; and the average cost per acre; how many applications are outstanding; to how many men have loans been made and to what total amount; and whether he can state the total estimated loss due to uneconomic rents which will be incurred as the result of small holdings hitherto established under the above-mentioned Act?

Sir A. BOSCAWEN: As the answer to this question is very long, I propose to circulate it in the OFFICIAL REPORT.

The following is the answer prepared:


LAND SETTLEMENT.


England and Wales.


Number of men actually settled (civilians and ex-service men)
5,794 on 79,631 acres.


Total acreage acquired, or agreed to be acquired, by the County Councils with the Ministry's approval
187,590
acres.


Average cost of land per acre Number of applications outstanding (ex-service men and civilians):—
£41
4s.



Approved and awaiting land
20,060



Waiting interview; and standing over
10,890






30,950


Loans guaranteed (figure's only available up to 31st December, 1919)
10 for a total of £1,575.

Full information has not yet been received from the Councils as to the terms (including rent) on which the holdings have been let to those men already in occupation. Moreover, certain questions of equipment are still outstanding, and
it is therefore not possible at present to supply precise information in reply to the last part of my hon. and gallant Friend's question.

In addition to this the Ministry has acquired 28,294 acres for the purposes of farm settlements.

Out of a total of 1,891 applicants, 697 have been approved, and of these 511 men are already settled. Forty-eight applicants are awaiting interview. The remaining applications have either been withdrawn or rejected.

COUNTY AGRICULTURAL COMMITTEES.

Captain COOTE: 56.
asked the Parliamentary Secretary to the Ministry of Agriculture whether all county councils have as yet submitted schemes for the formation of County Agricultural Committees; and in how many cases have these Committees actually been appointed?

Sir A. BOSCAWEN: Schemes for the formation of County Agricultural Committees have been received, some in draft, in the case of 46 county councils up to the present. Fourteen have been finally approved, and in one case the Committee is complete and is to hold its first meeting this week. In 13 cases the appointment of the Committee is still proceeding. In the case of the remaining 32 schemes, 21 have been provisionally approved and 11 are now under consideration. In the case of 16 councils, no scheme has yet been submitted.

AGRICULTURAL WAGES.

Captain FITZROY: 58.
asked the Parliamentary Secretary to the Ministry of Agriculture whether he has information that, although the recent order of the Wages Boards directing an increase of the minimum wages to 42s. and in other cases by not less than 4s. has only just been made effective, a demand for a further rise of 8s. has been made; and whether, in view of the fact that the recent Government announcement as to wheat prices was made at a time when the lowest minimum wage was 36s. 6d., any further rise in wages will be accompanied by a revision of these prices?

Sir A. BOSCAWEN: The impending rise in wages of 4s. was anticipated and
taken into account when the recent announcement with regard to wheat prices was made. If it should become necessary to revise these prices in the future, due-consideration will be given to any variations in the cost of production.

KEW GARDENS (WAGES AND HOURS).

Mr. ALFRED DAVIES: 59.
asked the Parliamentary Secretary to the Ministry of Agriculture whether he is aware that several communications have been sent to the Board by the employés in the Royal Gardens, Kew, regarding the inadequacy of the present wage and bonus to meet the increased cost of living; whether he is aware that the wages, including bonus, at the present time of stokers amount only to £3 9s. 5d., constables £2 18s. 5d., night watchmen £3 9s., labourers £2 15s. with an increase of 1s. after five years, and carters £2 16s. with an increase of 1s. after five years; and whether, in view of the increased cost of living since the award of the last bonus in November, he will recommend an all-round increase of £1 per week?

Sir A. BOSCAWEN: I am aware of the facts stated in the first two parts of the question. In answer to the last part, all the officials mentioned in the question are at present obtaining the maximum bonus which has been granted to civil servants by the Civil Service Arbitration Board, and they will participate in any further bonuses which may be granted.

Mr. W. THORNE: Is the right hon. Gentleman aware that the Government is pledged right up to the hilt to pay trade union rates of wages, according to the Resolution of the House, and are these rates of wages in accordance with the proper rates of pay?

Sir A. BOSCAWEN: This is really a question for the Government as a whole, and we cannot in one Department go outside the awards granted by the Civil Service Arbitration Board.

Mr. SHORT: 60.
asked the Parliamentary Secretary to the Ministry of Agriculture whether he is aware that, in the establishment of a 48-hour week for the employés at Kew Gardens, those who work most hours, namely, the stokers, 61½ hours per week, the constabulary, 59½
hours per week, and the night watchmen, 60 hours per week, have been excluded from participation; and whether he will give instructions for the concession to be applied to all grades?

Sir A. BOSCAWEN: The constabulary at Kew were included in the concession of a 48-hours' week on 8th June, 1919. It has now been settled that the stokers and night watchmen shall participate in this arrangement, but the date from which this arrangement shall come into force is at present under consideration.

FARMERS' PROFITS.

Mr. W. R. SMITH: 63.
asked the Parliamentary Secretary to the Ministry of Agriculture whether information has been obtained by his Department as to the profits of farmers in 1919–20 as compared with 1913–14; and, if so, whether he could state the gross profit and the net profit after allowing for taxation?

Sir A. BOSCAWEN: No such information as that referred to by the hon. Member is in the possession of the Ministry.

Mr. SMITH: Is it obtainable from any source whereby it could be published?

Sir A. BOSCAWEN: It would be very difficult to get any adequate information, because, as my hon. Friend knows, the great majority of farmers do not pay tax under Schedule D.

Oral Answers to Questions — MUNITIONS.

GRETNA FACTORY (DISCHARGED EMPLOYEES).

Major W. MURRAY: 65.
asked the Parliamentary Secretary to the Ministry of Munitions whether he is aware that a claim for one week's wages in lieu of notice, made by certain ex-service men employed at Gretna factory during the railway strike and dismissed with one day's notice, has been refused; and whether, in view of a recent decision given by Lord Sands in a similar case to the effect that such men were entitled to a week's wages in lieu of notice, and of the tact that the men in question were not told that their employment was temporary or from day to day, he will state the reasons for the Department's
action in this case or cause the matter to be re-investigated?

The FINANCIAL SECRETARY to the MINISTRY of MUNITIONS (Mr. James Hope): The answer to the first part of the question is in the affirmative. In September, 1919, a number of men were employed to take the place of lorry drivers on strike. On the termination of the strike these men were given one day's notice as they were engaged on the strict understanding that their employment was for the duration of the strike only. I am advised, in view of these conditions of employment, that this is a case which falls within the category of "discontinuous and temporary employment" within the meaning of the Acts.

ARCHIVES DEPARTMENT.

Brigadier-General CROFT: 68.
asked the Parliamentary Secretary to the Ministry of Munitions whether he can give the names of the ex-service men among the new appointments to the Archives Registry; whether it is a fact that, notwithstanding that Mr. Hankinson's dismissal was to enable the employment of ex-service men, the several new officials appointed are non-service men; and whether steps will be taken to substitute ex-service men for these new officials?

Mr. HOPE: No new officials have been appointed, but four non-Service men have been transferred to the Archives Registry from the Main Registry in the Ministry. The new and important duties of weeding-out the Ministry's official documents and files with a view to permanent retention or destruction are such as can only be performed by experienced officials. It has not been found possible to secure from the Ministry's staff ex-Service men possessing the necessary experience.

Brigadier-General CROFT: Who is the ex-Service man appointed in the place of Mr. Hankinson since that was the reason for his dismissal?

Mr. HOPE: I have said that no new officials have been appointed, but that four non-Service men have been transferred to the Archives Department from the Main Registry.

Brigadier-General CROFT: Were they transferred in order to take the place of Mr. Hankinson?

Mr. HOPE: Certainly not

Mr. BILLING: (Speaking from the Members' Gallery): Is it not the fact that the Ministry are still employed taking into their employment men who did not serve during the War, and having regard to the fact that men who did serve are qualified though unemployed, will the hon. Gentleman now endeavour to search out and find these men and give them employment?

Mr. HOPE: My ears are not quite accustomed to sounds from that quarter, and I did not catch the first part of my hon. Friend's question.

Brigadier-General CROFT: 69.
asked the Parliamentary Secretary to the Ministry of Munitions whether at the time of Mr. 0. J. Hankinson's appointment as superintendent of the archives registry it was understood that the appointment was for a term of years coincident with the existence of that Department as an organisation separate from the Record Office and represented the period that must elapse before the Statute of Limitations could apply to the documents of the nature of contracts which numbered several millions; whether he is aware of the existence of documents at the headquarters of the Ministry of Munitions or elsewhere which bear out this contention; and whether he will at once take the necesary steps either to restore Mr. Hankinson to the position of which he has been deprived or to offer him compensation for wrongful dismissal?

Mr. HOPE: I am not aware of the existence of the documents referred to by my hon. and gallant Friend. Mr. Hankinson was not led to believe that his temporary appointment was for a period of any particular duration. I am not prepared to recommend the restoration of Mr. Hankinson to his previous position. He has not been wrongfully dismissed, and there is, therefore, no question of offering him compensation.

Brigadier-General CROFT: In view of the fact that none of the reasons that have been given for the dismissal of Mr. Hankinson have been found to be accurate, will the hon. Gentleman himself inquire and re-consider the whole of this case?

Mr. HOPE: I am certainly not for a moment prepared to admit the assump-
tion upon which the question of my hon. and gallant Friend rests. But, as I have already told him, if he can supply a prima facie case on this or any other subject I will see what can be done. My contention is that Mr. Hankinson was dismissed in the ordinary course of the reduction of staff.

Oral Answers to Questions — NAVAL AND MILITARY PENSIONS AND GRANTS.

MEDICAL ASSESSORS.

Major MOLSON: 70.
asked the Minister of Pensions whether, as the medical men employed as assessors on sessional rates are continuously employed for the same hours as the Medical Commissioners, he can see his way to pay them as equitably and allow them leave with pay and sick leave with pay?

The PARLIAMENTARY SECRETARY to the MINISTRY of PENSIONS (Major Tryon): It is not considered that medical assessors employed at sessional rates are inequitably paid. Their conditions of service are different from those of whole-time Medical Commissioners or Deputy-Commissioners. The question of leave with pay cannot arise in the case of men who are engaged on a sessional, and not a salaried basis.

MINISTRY OF PENSIONS (MEDICAL MEN'S PENSIONS).

Mr. ROBERT YOUNG: 71.
asked the Minister of Pensions the number of regular naval and military medical men employed by the Ministry who are in receipt of pensions; and how many of these receive pensions of over £500 a year?

Major TRYON: There are twelve regular naval or military medical men employed on a salaried basis in the Ministry in various parts of the country who are in receipt of pension in respect of their naval or military service. Inquiry is being made as to the amount of pension in each case, and the hon. Member will be informed of the result.

TELEPHONE DIRECTORY (CLASSIFIED TRADES).

Sir HARRY BRITTAIN: 73.
asked the Postmaster-General whether the contract
for a telephone directory of classified trades has been completed yet; and, if so, with what firm?

The ASSISTANT POSTMASTER-GENERAL (Mr. Pike Pease): The contract has not yet been completed.

Oral Answers to Questions — HOUSING.

NEW BUILDINGS AND EXTENSIONS.

Mr. ROSE: 74
asked the Minister of Health if new buildings and extensions of existing buildings to be used for the sale of clothing and finery or for hotel accommodation are regarded by his Department as of greater necessity that the housing of the people; and whether he is taking, or contemplates taking, measures to induce local authorities to restrict and discourage such building?

Commander EYRES-MONSELL: After consultation with the Joint Industrial Council of the Building Trade, I have issued a Memorandum, a copy of which I will send to the hon. Member, for the guidance of local authorities in the exercise of their powers of prohibiting buildings of less public importance than housing. It will be seen that, subject to the consideration of special local conditions, I have suggested some general principles in connection with the order of priority in which various classes of buildings should be placed. As regards the first class of buildings mentioned by the hon. Member, I certainly consider that they cannot be regarded as being as urgent as the provision of houses.

BUILDING TRADE (SCOTLAND).

Mr. W. GRAHAM: (by Private Notice) asked the Minister of Labour whether his attention has been called to the fact that following a recent decision of the Industrial Court there is deadlock in the relations between employers and workers in practically all branches of the Scottish building trade; whether, in spite of the finding of the Court that no increase in wages should be given, the employers offered an extra 1½d. per hour provided it was accepted by all sections; whether the only section refusing to accept was that representative of the carpenters and joiners; whether, unless a settlement is
reached, a strike affecting the whole building trade of Scotland may begin on Friday first; and whether, having regard to the serious effect of such a stoppage in the present urgent position of Scottish housing schemes, he will take steps either to try to bring parties together again, or to secure fresh consideration of the employers' offer and the present proposals of the workers by the Industrial Court?

The MINISTER of LABOUR (Dr. Macnamara): I am aware of the position which has arisen in the Scottish building trade. The finding of the Industrial Court, dated 30th March last, was that a claim on the part of the operatives for an advance in wages of 6d. an hour was not established. I understand that the operatives were dissatisfied with the award of the Court, and that, notwithstanding the arbitrator's decision, the employers thereupon offered to concede the claim to the extent of giving an increase of 1½d. per hour, the balance of the claim for. 6d. to be referred again to the Industrial Court for arbitration. The carpenters are not satisfied with this offer, one of the reasons for their dissatisfaction being the fact that they have just obtained from the Shipbuilding Employers'. Federation an offer of an advance of 12s. per week over and above the advance of 6s. per week given by an award of the Industrial Court on 10th March. I am informed that tentative arrangements have been made for a conference this week between the employers in Scottish buildings trades and building trade operatives, including the joiners. My hon. Friend will appreciate that the Ministry of Labour would have considerable difficulty in attempting to mediate in this dispute. I propose to await the result of the conference to which I have referred before considering what steps should be taken by the Department in this matter.

Mr. GRAHAM: Arising out of that reply, for which I am very grateful, is my right hon. Friend aware that since Friday last a General Minute has been laid the effect of which is to request that this matter should go again to the Industrial Court, and in view of the serious position in Scotland, which we all appreciate, will he take steps to hasten that, and if necessary have the question again considered by the Industrial Court?

Dr. MACNAMARA: No doubt the matter will be brought before the Court, I hope, immediately; but I should like to discuss it forthwith with my hon. Friend.

BUSINESS OF THE HOUSE.

Sir DONALD MACLEAN: May I ask the Leader of the House, on the assumption that the Debate on the Budget terminates before the usual hour, which is sometimes the case, what Orders on the Paper it is proposed to take, and will he tell us what is the special reason for putting down the Motion on the Paper, to exempt this day's proceedings from the Standing Order (Sittings of the House), which stands in his name, at all? Will the right hon. Gentleman also state what Vote he proposes to take on Thursday?

Mr. BONAR LAW: The Motion to which the right hon. Gentleman alludes is always put down on Budget night in case certain necessary Resolutions should not be got through in time. If we adjourn early we shall ask the House to allow us to proceed with the remaining stages of the Austrian Treaty. On Thursday, we had intended to take the Transport Vote, but I understand that the Select Committee on Finance desires that Vote to be postponed, and we have agreed to their suggestion. We propose, therefore, to take the Vote for the Ministry of Agriculture on Thursday.
Ordered, "That the Proceedings of the Committee of Ways and Means be exempted at this day's Sitting from the provisions of the Standing Order (Sittings of the House)."—[Mr. Bonar Law.]

BILL PRESENTED.

PROTECTION OF ANIMALS ACT (1911) AMENDMENT BILL,

" to amend the Protection of Animals Act, 1011 "; presented by Lieut.-Colonel ARTHUR MURRAY; supported by Sir Frederick Banbury, Colonel Burn, Sir John Butcher, Mr. Newbould, Mr. Spoor, Major Mackenzie Wood, and Sir Alfred Yeo; to be read a Second time upon Monday next, and to be printed. [Bill 76].

NEW MEMBERS SWORN.

CHARLES ALBERT M'CURDY, Esquire, K.C., For Borough of Northampton.

Sir ARTHUR RICHARD HOLBROOK, K.B.E., For County of Hants (Basingstoke Division).

SELECTION (STANDING COMMITTEES).

STANDING COMMITTEE B.

Sir SAMUEL ROBERTS reported from the Committee of Selection; That they had discharged the following Member from Standing Committee B: Sir John Rutherford.

Sir SAMUEL ROBERTS further reported from the Committee; That they had discharged the following Members from Standing Committee B (added in respect of the County Councils Association Expenses (Amendment) Bill, the Tramways (Temporary Increase of Charges) Bill, the Savings Banks Bill, and the Imperial War Museum Bill): Mr. France and Sir Herbert Nield.

Reports to lie upon the Table.

Orders of the Day — WAYS AND MEANS.

Considered in Committee.

[Mr. WHITLEY in the Chair.]

Orders of the Day — FINANCIAL STATEMENT.

4.0 P.M.

THE CHANCELLOR OF THE EXCHEQUER (Mr. Chamberlain): It is recognised on all hands that the present financial year is one of capital importance in the history of Europe and not least for those nations which emerged victorious from the late world - wide struggle. Eighteen months have elapsed since the preliminaries of peace were signed with Germany, and, though peace follows with limping footsteps, the time has come when each of us should set his house in order, and, not content merely with facing our immediate necessities, should lay broad and deep the foundations of future credit and prosperity. The Budget which I present to-day, therefore, is a critical one. I shall have to make a large demand upon the patience of the House, but, in order to lighten my own task, and, still more, to lessen the burden upon Members, I will ask them to allow me to defer to other occasions, or to lay before them in the White Papers now in their hands, or which will shortly be available to them, details and explanations which otherwise I should have included in my Budget statement.

REVENUE AND EXPENDITURE, 1919–20.

The Paper in the hands of hon. Members gives details of the results of the past financial year. I shall comment only on the main points. The expenditure of the year was estimated in my last Budget statement at £1,434,910,000. The Exchequer issues were £7,000,000 less than the total voted by Parliament, but they exceeded the Budget Estimate by £230,862,928, and my October Estimate by £23,500,000. This expenditure includes a sum of £87,000,000 on account of expenditure actually incurred and voted by Parliament in the previous year, but not brought to account until the year just closed. Excluding that charge, the expenditure in 1919–20 was approximately £144,000,000 in excess of my Budget Esti-
mate, but £63,000,000 below the Estimate which I presented to the House in October.

CUSTOMS AND EXCISE REVENUE.

On the Revenue side, the result was not only more favourable than I anticipated in October, but greatly exceeded my original Budget Estimate. The Budget Estimate of revenue for 1919–20 was £1,201,100,000. The actual Exchequer receipts were nearly £138,500,000 more. Customs and Excise gave an increase of £45,500,000 over the Budget Estimate, and £7,000,000 over the Estimate which I gave in October. This increase, which is nearly 20 per cent. over the Budget Estimate, is mainly due to the increased yield of the taxes on beer, spirits, tobacco, and tea. In the case of beer and spirits the surplus, £11,250,000 on the former and £6,700,000 on the latter, was due to the removal of restrictions on the supply for home consumption. The case of tobacco and tea was different. In regard to neither were any restrictions in force, and the very largely increased yield reflects almost entirely an increased consumption, and therefore an increased spending power in the mass of our people. In framing the Budget Estimate of last year, I assumed only a normal increase in the rate of consumption of tobacco, but in fact the actual increase has been unprecedented. The quantity retained for consumption increased from 114,000,000 lbs. in 1918–19 to about 150,000,000 lbs. in 1919–20, and, although part of that tobacco may have gone to replenish duty-paid stocks in traders' hands, the increase in the main is due to an astonishing growth in consumption. Broadly speaking, this may be attributed, in the first place, to the continuous rise in wages; in the second place to the return of our armies from abroad; and in the third place to the growth of the habit of smoking among women. The surplus on tobacco amounted to about £14,000,000, and tea showed a surplus of £3,550,000. In the case of tea the clearances for home consumption increased from 321,000,000 lbs. in 1918–19 to over 400,000,000 lbs. last year. It is possible that traders' stocks may be high, but even with a liberal allowance for that possibility the consumption of tea is quite unique. I need not refer in detail to other items of Customs and Excise, except, perhaps, to say that the Entertainment Duty has yielded nearly
£10,500,000 in all, or £2,500,000 more than was anticipated.

INLAND REVENUE RECEIPTS.

Turning to the Inland Revenue, the receipts from that source show yields in excess of my Budget Estimate under every important head except Excess Profits Duty. The Income-tax and Super-tax realised £5,000,000 above the Estimate, principally owing to the very high level of profits in 1918–19. The Death Duties were estimated to produce £33,500,000 in view of the increase which I made in those duties by the Finance Act of last year. They, in fact, produced £7,500,000 more. It will interest the Committee, I think, to know that over £9,000,000 of the Death Duties were paid in War Securities of which Victory Bonds accounted for £2,500,000. I am reminded that when that issue was open I was told by a gentleman that a very wealthy friend of his at the age of seventy or over had consulted him as to whether at his age it was worth while as an insurance to take Victory Bonds, which, being issued at 85, were tenderable for Death Duties at the value of £100. The Excess Profits Duty showed a surplus of some £10,000,000 on my reduced estimate of October, but a deficiency on the Budget Estimate of about an equal sum. The payment of that difference, however, is only a pleasure deferred, because what was not received last year will come into the Revenue in the current year. I may add that the excess profits assessed during the year showed an upward trend, and I may remind the Committee that the yield of this tax in any given year is derived from the proceeds of the tax in the preceding year, the collection in this case following in the main in the year succeeding that in which the tax is imposed. Therefore, the duty accruing on the excess profits of last year will be mainly received in the current year. Stamp Duties again broke the record. Their yield was £10,500,000 in excess of the Estimate.

Mr. ASQUITH: Could the right hon. Gentleman say to what the excess in the Stamp Duties was due?

Mr. CHAMBERLAIN: The excess in the stamp duties was due to the extraordinary amount of business liable to Stamp Duty. Floatations of companies, sales of land, and other transactions subject to Stamp Duties showed a phenomenal expansion.

MISCELLANEOUS REVENUE.

The only other item of last year's revenue with which I need trouble the Committee is the Miscellaneous Revenue. I think they will desire some explanation in regard to that item, which has exceeded the original estimate by £71,000,000 and the October estimate by £130,000,000. In the return issued on 31st March last I divided this revenue into Ordinary Miscellaneous Revenue and Special Miscellaneous Revenue, and I propose to follow that division in future. The Ordinary Miscellaneous Revenue, derived from such things as the Mint receipts, Fee stamps, and surplus interest due to the Exchequer under the Treasury Minute of May, 1915, from the Currency Note Investment Reserve Account, exceeded the original estimate by £9,600,000. Under the head of Special Miscellaneous Revenue the war contributions of India and the Colonies showed an increase of £10,000,000, due to a further payment of £9,000,000 by India on account of the liability voluntarily assumed by her for £100,000,000 of the 5 per cent. War Loan, and to war contributions from the Straits Settlement, Hong Kong and Guernsey, and from the Bank of England, which, as the Committee knows, very handsomely surrendered all its profits over the pre-War rate. Vote of Credit realisations showed an increase of £51,300,000 on the original estimate, mainly owing to unexpectedly large receipts from the Ministry of Shipping and the Ministry of Munitions.

BALANCE SHEET, 1919–20.

Bringing together the two sides of the account, we find that the Exchequer issues were £1,665,773,000 and the revenue was £1,339,571,000, leaving a deficiency of £326,202,000; that is to say, £76,202,000 more than the Budget Estimate, but nearly £147,000,000 less than seemed probable in October. Of the total issues in 1919–20 80'4 per cent, was provided by revenue, and 19'6 per cent. by borrowing. In the preceding year the figures were 34'47 per cent. from revenue, and 65'53 per cent. from borrowing. The percentages for the six years from 1st April, 1914, to 31st March, 1920, which are the years of War borrowing, were 3617 per cent. from revenue and 63'83 per cent. from borrowing, a proportion which, thanks to the courage of my predecessors, holds, I think, a good record as we look back upon the course of those years.

NATIONAL DEBT.

The dead weight debt on the 31st March last was estimated to amount to £7,835,000,000, but without some explanation that figure would be misleading. In the first place, a part which I estimated at from £130,000,000 to £140,000,000 of the increased nominal total is due to the conversion of various 5 per cent. issues into 4 per cent. Victory Loan issued at 80 and 4 per cent. Victory Bonds, issued at 85. The effect of these conversions is to increase the face value of the debt while leaving the interest charge practically unaffected. In the next place, owing to the uncertainty of the date at which War Savings Certificates would be tendered for repayment, those certificates have hitherto always appeared in our accounts at their purchase price, 15s. 6d. The figure which I have just given for the first time includes them at their estimated value, allowing for accumulations of interest for the respective periods up to date. This gives a much truer picture of our actual position at the moment, but the addition involved by these changes amounts to £24,000,000, and a comparison of the increased total debt which I have given the Committee now with the figures in any previous years is vitiated to that extent. On the other hand, now, as previously, the debt figures represent with that exception the nominal value, and, therefore, do not include additional premiums due on the maturity of National War Bonds. If all these Bonds were held until they matured the premium would represent eventually a further obligation of £46,000,000. That figure will, in fact, be reduced in future by tender of these bonds before maturity in payment of duties and taxation.

FLOATING DEBT.

I turn now to the outstanding features of the debt transactions for the year. In the first place, the floating debt on the 31st March, 1919, was £1,412,228,000. On the 31st March last it was £1,312,205,000, a decrease of almost exactly £100,000,000 in the twelve months in the total of the floating debt. But that is not all. The worst feature of that floating debt is the Exchequer borrowing from the Bank of England on Ways and Means, for this is the immediate cause of the inflation of credit and, in so far as the inflation of prices arises from the inflation of credit, it is also the cause of that inflation of prices. Advances made to the Treasury
out of moneys in the hands of the National Debt Commissioners and other Government Departments do not have a similar inflationary effect. I have, therefore, in the recent Returns distinguished not merely, as was customary, between Ways and Means advances and Treasury bills, but also between Ways and Means advances by the Bank of England and similar advances by Government Departments. The result is striking, and I venture to say it is important. On the 31st March, 1919, the Bank Ways and Means advances were £228,500,000; on the 31st January last they had been reduced to £34,500,000, while on the 31st March they had been actually wiped out altogether.

But I am sorry to say that as regards Ways and Means advances, and I may add as regards Currency Note issues, the first weeks of April have disclosed a much less satisfactory position. In the three weeks which ended on April 7th, the number of currency notes in circulation increased by 14,500,000 and the Bank of England notes by £5,700,000, and the reserve of the Bank of England fell by £11,760,000 to the very low figure of £23,784,000. During the first ten days of April, although revenue exceeded expenditure, I was forced to borrow not less than £55,000,000 from the Bank of England on Ways and Means, owing to the non-renewal of maturing Treasury Bills to the extent of £64,000,000. Under these circumstances, I had no choice but to raise the Treasury bill rate and the Bank of England simultaneously raised the Bank rate. The story of those first days in April illustrates only too vividly the difficulties caused by the existence of this enormous floating debt and the urgent need for an effective remedy. Ways and Means advances from the Bank of England are a justifiable method of anticipating revenue for a short period, but recourse to them to meet the withdrawals of money from Treasury bills involves the creation of new purchasing power based solely on Government credit uncovered and unprotected by any increased production of wealth, and can only lead, if unchecked, to ultimate disaster. I shall have more to say on the subject of the floating debt before I conclude.

EXTERNAL DEBT.

Of the total deadweight debt estimated at £7,835,000,000, external debt accounts for £1,278,000,000 showing a reduction of £86,000,000 in the course of the year, a
not unsatisfactory result, and these figures will be further reduced in the current year by the repayment of the Anglo-French loan of 500,000,000 dollars. The Committee is aware that the French and British Governments have decided to repay the whole of that loan next autumn without further borrowing in the United States, and each Government will provide for half of the total maturity. We ourselves have already begun to ship gold to meet our share, and the announcement of our intention and the action already taken have had the happiest effect on our credit and justify any sacrifice which is involved.

WAR SAVINGS CERTIFICATES.

Before passing from the year which has just closed, there is one other subject which I cannot leave un-mentioned—I refer to the work of the National Savings Committee. The House is aware that the Government have decided that there shall be no more borrowing to balance revenue and expenditure. Henceforth if we borrow it is only to fund the floating debt or to replace maturing debt. Of all forms of borrowing the sale of Savings Certificates is one to which I have recourse in so far as it is within my power with the greatest readiness. Before the War it was our misfortune and to some extent our reproach that the premier national security of the world, the stocks and obligations of the British Government, were held in comparatively few hands, and that so few of our citizens had any interest in them. That reproach has been removed by the success of the Savings Movement. Apart altogether from the needs of the State, the Savings Movement, fostered by the National Savings Committee, has had such remarkable and such admirable results that it would be a national misfortune if it were now allowed to come to an end. A few weeks ago the number of certificates sold reached 400,000,000. Nearly 141,000,000 have been sold since the date of the Armistice. There must of course on the other side be withdrawals. We have always expected them and must expect that they will increase as the years go on. But it remains the case that against the 400,000,000 certificates sold, representing an original capital of £310,000,000, the withdrawals barely reach £38,000,000, not a little of which
has gone into other Government securities. For this great movement with these wonderful results we are indebted to a devoted band of voluntary workers up and down the country who have acted under the chairmanship of Sir Robert Kindersley. He has found it necessary to resign the chairmanship within the last few weeks, although I am glad to say he has consented to remain with the movement as President and to lend it the assistance of his authority and his personal supervision. But I cannot allow the resignation of the Chairmanship by him to pass without paying on the floor of this House my tribute of gratitude, and may I say a tribute of gratitude from the Committee, to him for his devoted labour and for the unexampled success which has attended it. I am glad to be able to announce to the House that I have succeeded in obtaining the services of Lord Islington as his successor, of whose ability and energy in public work I was myself able to form an opinion when he and I served together at the India Office. The Savings Certificates as they will henceforth be known, will therefore continue. The need of capital for public purposes, national and local, is still extreme. There should be no narrow or jealous rivalry between the State and local authorities in this matter, and I hope the National Savings Association will serve both interests and offer to those whom it can influence the opportunities of thrift which are given by the issue of the securities of local authorities and by the issue of Saving Certificates by the State. I do not wish to treat the assistance which the Treasury receives from the sale of Savings Certificates as a means of dealing with the Floating Debt otherwise than as a happy bye-product of the movement in favour of thrift and wise spending which is being initiated by the Savings Committee. It is, however, pertinent to observe that the sale of Savings Certificates brought in over £48,000,000 last year, and accounted, therefore, for nearly half the net reduction in the Floating Debt.
It may be too sanguine to hope for as large a net receipt during the current year, but I would venture to suggest to the National Savings movement that they have this year a great opportunity. Our share of the Anglo-French Loan maturing in October is, roughly, £50,000,000. Let us buy it back by the sale of Savings Certificates. Then, instead of owing that
sum to creditors in America, we in this country shall be the holders of our own securities, and a burdensome external liability will have become a valuable national asset.

REVENUE FOE 1920–21.

I come now to the present year. On the present basis of taxation, I estimate the total revenue at £1,341,650,000. Hon. Members will find full details in the White Paper which will be available to them as soon as I have finished my statement. Meanwhile, I may say that this total comprises a non-tax revenue of £376,650,000— in which is included £320,000,000 of Miscellaneous Revenue, mainly derived from the sale of Vote of Credit Assets; and a tax revenue of £965,000,000, of which Customs and Excise contribute £300,000,000, Income Tax and Super-tax £387,000,000, Death Duties £45,000,000, and Excess Profits Duty £210,000,000. The estimated yield of the Excess Profits Duty represents, in the main, as I have already explained, tax payable in respect of accounting periods already closed or approaching their term. For this reason, even if the tax were now brought to an end, the main part of this sum would still be receivable in the current year. The yield is greatly in excess of any forecast which I should have dared to make a year ago, owing to the continuance of an abnormally high general level of profits.
The only other item on the revenue side of the account to which I need refer is Miscellaneous Revenue. I think this may safely be put at £320,000,000, though it is a form of revenue the receipts from which are very difficult to estimate accurately. Ordinary Miscellaneous Revenue provides £18,000,000, and Special Miscellaneous Revenue £302,000,000. I propose, as I have explained to the House on previous occasions, that this year all Disposal Board receipts shall be paid directly to the Exchequer, and none appropriated in aid of the Munitions Votes. Receipts by the Ministry of Shipping will be similarly treated, as will also certain other receipts from Dominions and Allies due to the Fighting Services. The main items in the Special Revenue of £302,000,000 are Disposal Board Receipts, which may reach £120,000,000, and receipts from the sale of raw materials, which I put at £60,000,000. As I have said, it is very difficult to estimate this class of revenue accurately, but I think
£320,000,000 for the whole may be regarded as a safe figure. If that figure is exceeded, there will be so much the more available for the reduction of debt.

EXPENDITURE FOR 1920–21.

Passing to expenditure, the Estimates for Supply Services have already been presented to the House. The totals are large, and no Chancellor of the Exchequer would desire to pretend that they are anything but formidable, or that it is not disappointing that further reductions have not yet been possible. At the same time, I would invite the Committee, and our critics, not to forget that the Supply expenditure, for 1919–20 represented a reduction of nearly 60 per cent. on that of the previous year, and that the Supply Estimates for the current year show a further reduction of some 35 per cent. on those of last year. In particular, the Committee will observe that the Army Estimates are reduced from £405,000,000 to £125,000,000, the Navy Estimates from £157,500,000 to £84,400,000, and the Air Estimates from £54,000,000 to £21,000,000. Moreover, the total of Supply Estimates includes £43,000,000 for the Ministries of Munitions and Shipping, for which only token sums were taken last year. Finally, the Estimates for the year necessarily still contain a very considerable provision for War charges. On the Votes of the Fighting Services alone this accounts for £56,500,000, excluding the cost of the additional garrisons in Mesopotamia, Egypt, and elsewhere. There are, in addition, many charges of a temporary nature in this year's Estimates, which are directly or indirectly due to the War, such as loans to Allies or for relief, the training, and resettlement of ex-soldiers, the cost of the temporary Ministries, liquidation of War contracts, and, last, but greatest of all, the Bread Subsidy. These and similar items of extraordinary expense impose a transitory charge of over £300,000,000 on the Estimates of the current year, and cancel any assistance that I might otherwise have obtained from the extraordinary Miscellaneous Revenue for the reduction of debt. The expenditure will thus be as follows: The Consolidated Fund Services, inclusive of £345,000,000 for interest on the National Debt, but exclusive of any Sinking Fund, amount to £369,548,000; and the Supply Services, as presented to the House, amount to £787,904,121. To this I must
now add a further sum of £20,000,000, partly to cover the extra cost of Unemployment Insurance, as provided in the Bill now before the House, and partly to cover the cost of certain agreements with the Dominions of Australia and New Zealand with respect to the Island of Nauru, with regard to which a Bill will shortly be presented to the House by the Colonial Office; but mainly in order to provide the cost of re-classification and further war bonus throughout the public service. I thus reach, in round figures, an expenditure of £1,177,452,000, against a revenue of £1,341,650,000, leaving, on the existing basis of taxation, £164,000,000 for the reduction of debt.

REDUCTION OF DEBT.

I hope the Committee will feel that I have adequately fulfilled the expectation which I held out in October, that, if no additional expenditure were incurred in the interval, there would be a substantial surplus this year, on the present basis of taxation, to go towards reduction of debt. But is that surplus sufficient? In the opinion of His Majesty's Government it is not. It is true that it represents more than 2 per cent. on the total debt, and a Sinking Fund of 2 per cent. would redeem the debt in 26 years—just a generation. This, in ordinary circumstances, would be, not merely an ample, but an extravagant, Sinking Fund. But the circumstances are not ordinary, and, apart from certain minor changes in taxation necessary for other reasons, I am going to call upon the Committee and the country for a further generous effort to improve our credit, and, by present sacrifice, to lighten our future burden and establish securely our national credit. I do so with confidence that the Committee and the country will respond in the same spirit in which they met every call for sacrifice during the War. Even to-day we reap the reward of those past sacrifices. If our position is easier, our credit higher, and our prices lower, than those of other belligerents, it is because we, more fortunately situated than they, were able to raise a larger proportion of our expenditure out of revenue during the War, and, therefore, find ourselves with less leeway to make up now. Though we may find cause for satisfaction in what has already been accomplished, and though, in this sense, virtue has
brought its own, but a real reward, we are only at the beginning of the road. Last year we actually added to our debt; this year we must begin to reduce it, and the beginning must be substantial.
The only statutory Sinking Funds at present in existence are those for the Funding and Victory Loans of last year. These amount, at present, to one-half per cent. on a nominal total of £768,000,000, or £3,840,000 per annum. This initial sum, of course, increases automatically as the Funding Loan is redeemed and Victory Bonds are drawn, but the extra sum, above the amount originally required for interest, which I have to consider in the current year is £3,840,000. I will ask the Committee to remember that Victory Bonds are accepted at their face value of £100, and Funding Loan at the issue price of £80, in payment of Death Duties. This means that I have to provide the cash equivalent of these sums, in order to enable the Inland Revenue to pay over the appropriate amount of cash to the Exchequer as Death Duty revenue. The amount required for this purpose in the current year clearly depends upon the amount of Death Duties which may be payable in Victory Loans. I can hardly estimate it at less than £10,000,000, out of the total Death Duty revenue of £45,000,000. Other War Loans have similar Death Duty privileges, and for them I require £5,000,000. Further, the taxpayer has the right to tender National War Bonds and certain Exchequer Bond issues in payment of Excess Profits Duty. This required £60,000,000 in each of the last two years, and I allow the same sum in the current year. Finally, there is a Depreciation Fund for the 4 per cent. and 5 per cent. War Loan, issued by my right hon. Friend the Leader of the House (Mr. Bonar Law), amounting to one-eighth per cent. per month on the original nominal value of the loan. This involves a maximum sum of £31,920,000. Altogether, these obligations amount to £110,760,000 before we are able to touch the Floating Debt. In addition, I have to make provision to meet old debt (mainly external) maturing in 1920–21. Altogether, allowing for reserves, and without basing any hope on the possibility of funding, I must make allowance for having to apply the sum of £160,000,000 of my surplus of £164,000,000 to the reduction of debt in other forms
before I can attack the Floating Debt. I ask the Committee to observe that all the Debt received in payment of tax is either cancelled when received, or held by us until drawn or redeemed in the terms of the original contract. Not a penny of it is re-issued to the public. I also call the attention of the Committee to the fact that this calculation is based upon the assumption that the liabilities maturing within the year are paid off as they fall due, and no part of them is renewed or funded.

POST OFFICE CHARGES.

At this stage I am obliged to ask the Committee to look at the position of the Post Office. In 1913–14 the Post Office revenue, after defraying all charges, yielded a net surplus revenue of £6,500,000. To-day there is a loss of £3,000,000. To this I have to add an estimated further loss of £8,000,000, as the probable cost of settling the outstanding claims of the postal service for additional wages and bonus. The increased wages of staff over the level of 1913–14 would then absorb no less than £29,000,000 a year. We are thus faced with a deficit on the Post Office of £11,000,000. It has become a subsidised service. I trust the Committee will support the Government in the determination that at least, if it yields us no net revenue, it shall not involve us in a loss. We, therefore, propose an increase in postal rates and charges. It will be found in detail in the White Paper. These increased charges are estimated to produce £6,500,000 this year, and enough when they are fully complete to balance the Post Office expenditure in a full year.
The main increases are as follows:—In the letter postage an increase to 2d. for 3 ounces and ½d. for each additional ounce. In the newspaper postage, now resulting in a heavy loss, there will be a postage of 1d. for 6 ounces, or less, instead of id., with id. for each further 6 ounces Parcel post will follow the increases already made in the rates for the carriage of parcels by rail. The minimum charge for telegrams will be raised to one shilling, with one penny for each additional word over twelve words. Proposals will be made in respect of telephone charges to the Select Committee to be appointed, and it is estimated that they will produce at least a further £2,750,000 a year. Charges for postcards and printed papers
will also be raised. The inland rates for these cannot be put up until the foreign rate is increased, and the foreign rate depends upon the decision of the International Congress which meets at Madrid in the autumn. We propose, however, to take power now to increase the charge for postcards to 1½d. and for printed papers proportionately, but not to bring these changes into force until after the Conference. There are other minor changes set out in the White Paper, and legislation will be necessary for these purposes

PETROL TAX AND CARRIAGE LICENCES.

I come now to changes in taxation, and I propose first to deal with changes which, though of importance in themselves, are of no great consequence to the Exchequer from the revenue point of view. In the first place, I have to deal with the Petrol Tax and the contribution of motors towards the development and upkeep of the roads. Last year I explained to the Committee fully the objections to the present Petrol Tax, and I will not repeat them now. Since then a Committee appointed by my right hon. Friend the Minister of Transport, of a very representative character, has been investigating the subject, and their Report has been laid before Parliament. The principle on which their new proposals are based is that road users should make a substantial contribution towards the cost both of the maintenance and improvement of the roads. The Committee support the objection which I expressed to the tax on motor fuel, and they recommend that a licence duty on motor vehicles should take its place. We propose substantially to adopt the recommendations of the Committee, but the new tax cannot be brought into force until 1st January next. I, therefore, propose to continue the existing motor car tax and the motor spirit duty until the 31st day of December next, when they will be superseded by the new tax.
I estimate that the Revenue from the existing taxes up to the 31st December will be £2,750,000, and that the yield of the new duties up to 31st March next will be £4,500,000. This gives a total Revenue for the current year of £7,250,000. From this there must be deducted £600,000 in respect of a prior lien already enjoyed by the local authorities, but I do not propose to claim any share of this taxation for the
Exchequer. There will therefore be a net Revenue for the Road Fund this year, if our proposals are adopted, of £6,650,000. In a full year the new taxation should yield £9,000,000 which, after the same deduction, should leave £8,400,000 for the Road Fund. It is proposed to submit legislation in due course extending the Road Improvement Fund Act so as to enable maintenance grants to be made from the proceeds of the new taxation. The Minister of Transport, who will be responsible for supervising the levying and collection of the taxes, and also for the spending of the money, will be prepared to give to the Committee at a later stage full details of the proposed legislation, and to answer any inquiries which may be addressed to him.

LAND VALUES DUTIES.

The next change raises the thorny question of the Land Values Duties. I regret that on this subject neither the Government nor Parliament have derived any guidance from the Select Committee which was appointed last Session; but the evidence laid before the Committee has been presented to the House and will, I think, be sufficient to enable the House to come to a decision. It is, I believe, universally felt, whatever division of opinion there may be, that for the reasons which I indicated last year, these duties in their present form are unworkable. They have produced hardly any revenue, and, from a variety of causes into which I will not now enter, they are, with the exception of the Mineral Rights Duty, either wholly or partially in abeyance, and can only be revived, if at all, by proposing legislation of a highly technical character. In these circumstances, if Parliament ever wishes to levy duties of that character it will have to begin over again. We have come to the conclusion that the proper course for us to pursue is to repeal the duties.

HON. MEMBERS: While the Prime Minister is away?

Mr. CHAMBERLAIN: That is a foolish observation. The hon. Member obviously does not understand Cabinet procedure. Does he think that a decision of this kind was taken in the absence of the Prime Minister, or without his full concurrence or approval? We have
unanimously come to the conclusion that the proper course to pursue is to repeal these duties, with the exception of the Mineral Rights Duty, which is a simple tax, offering no practical difficulties of administration. The question thereupon arises as to the course to be pursued in reference to arrears of duties which are outstanding. These arrears include duty which has been assessed, but which is unpaid, and duty which, owing to adverse decisions in the Courts and for other reasons, it has been impracticable even to bring into assessment. In numerous instances the arrears date back to the very inception of the duty. It will be recalled that no Undeveloped Land Duty has been assessed since 1914, although the duty is an annual one. The collection of arrears in such conditions is clearly impracticable, but any decision to give up the arrears raises at once the question of the duties which have already been paid. In that connection I must bring to the Committee's notice the statement made by my predecessor, Mr. McKenna, on the 1st April, 1916, when he was Chancellor of the Exchequer, that as regards the payment of Undeveloped Land Duty there would be no eventual discrimination. In the circumstances the repayment of Undeveloped Land Duty, where paid, must be authorised, and in that event I think the Committee will probably feel that Increment Value Duty and Reversion Duty should be dealt with on the same lines. I will only add this observation.
5.0 P.M.
Since the date when Mr. McKenna spoke, conditions have changed to an extent which no man could foresee, and I cannot help feeling that in the quite exceptional circumstances which have resulted from the duration of the War, which broke out at a time when otherwise the whole problem of the Land Duties would have come under review, many taxpayers will be content to let bygones be bygones, and will at any rate refrain, in cases where the duty is small and insignificant, from reclaiming it now from the Exchequer. In the ordinary course, I should have expected to receive some £500,000 from the Mineral Rights Duty and the Excess Mineral Rights Duty. It might be anticipated, under the circumstances I have described, that part of this sum will be swallowed up by repayment,
but I have left £500,000 standing in the White Paper as a conventional figure.

VALUATION OF LAND.

But whilst we propose to terminate the duty, we attach great importance to the existence of a State valuation of all the land and buildings of the United Kingdom based upon an up-to-date system of values, which would be available for the information of the Government and, within proper limits, of other public authorities, and which might be utilised in connection with any taxation proposals of the future or with a reform of rating. The present condition of highly fluctuating and unstable values shows that this is not the time for undertaking an immediate general valuation of the kind, and until conditions are more stable the Government feels that it would be premature to plan the precise form of the future valuations. But one thing is clear, that, in connection with any future valuation, it would be essential that the knowledge and information acquired by the Valuation Department of the Inland Revenue should be fully utilised. I therefore propose to continue that Department in its present form. In our view it is essential that there should be a thoroughly equipped and skilled State Valuation Department whose services would be available for the use of the Government.

Mr. KENNEDY JONES: Why not sack the lot?

Mr. CHAMBERLAIN: I will tell hon. Members why not—because we should lose a great deal more money than we should save. We are confirmed in the view of the necessity for the continuance of this Department by the great assistance which has been afforded by the Valuation Staff during the War in the requisitioning of land for War purposes, and by the proved worth of their service in connection with the acquisition of land for public purposes, such as housing and land settlement, as to which the Government has taken further large financial responsibilities. Apart from their revenue functions in connection with Death Duties, the Valuation Department will render such assistance to other Government Departments as occasion may require. For this purpose it is essential that the system under which
particulars of sales and leases of land are reported to the Inland Revenue should be continued in order that the Department may be in possession of the fullest information on which to base any fresh valuation that may have to be made.

INCREASED DUTIES: SPIRITS.

I have now cleared the ground. These, as I have said, are minor alterations important only as they affect particular interests, but bringing no additional revenue to the Exchequer. I come now to serious business. First, I address myself to spirits. At the time of my last Budget the delivery of spirits for home consumption was still subject to restrictions. In November all restrictions upon supply were removed. The trade is now free to clear to the full extent of the demand Owing to a variety of causes the cost of the manufacture of spirits, in which I include the cost of replacement of stock, has risen within the last year. Increases have taken place in wages, in cost of materials, in transport, and in other matters. Nevertheless, the removal of all restrictions on supply, coupled with the permitted scale of prices, leaves a margin of profit to the trade which is still more than reasonable, and I propose now to appropriate a further share of that profit to the Exchequer. But the amount which I could obtain from this source is insufficient under present circumstances. On this occasion I must ask the consumer, as well as the trade, to contribute. With their combined help, which I am sure they will readily give, I propose to increase the duty by 22s. 6d. to 72s. 6d. a proof gallon Prices will be readjusted accordingly, the retail price being raised by 2½d. per gill in public bars, and by 2s. per bottle. I estimate that the increased duty will yield in the current year £23,500,000 of revenue, and in a full year £24,500,000.

BEER.

From spirits I pass to beer. The restrictions on the supply of beer were first relaxed and then finally abolished before those on spirits. From 1st July last all restrictions on the amount brewed or consumed were removed. But as with spirits, so with beer, the cost of manufacture and distribution in the last twelve months has increased, especially in the late autumn and winter months, when there was a rise in price of materials generally and in the cost of
labour and transport. On the other hand, the price of barley, a, most important material for the production of beer, has now fallen, and on the whole I am satisfied that the profits of the brewing trade also would permit of some further increase in the beer duty, without raising the price of beer to the consumer. But again, such an increase as I could obtain from that source would be insufficient, and the consumer must contribute his quota. As he has now the advantage of a better brew at the old price, I hope he will contribute it willingly. I propose that the duty should be raised by 30s. a standard barrel, that is, from 70s. to 100s., and the price to the consumer by a penny a pint. I estimate that this will produce £22,500,000 in the current year and £30,000,000 in a full year. In connection with both beer and spirits the Food Controller has prepared new price Orders to give effect to the proposed changes. These Orders will come into force to-morrow.

WINE (SPARKLING AND STILL).

There remain the wine duties. Notwithstanding the heavy increases made in the beer and spirit duties in recent years the wine duties have remained untouched since 1899. Nothing but consideration pushed to its utmost limit for the feelings of our Allies, especially France and Portugal, would have justified me in making so large an increase in the beer and spirit duties last year whilst leaving the wine duties untouched, and I think the Committee will agree that it would not be possible to contemplate the further increases for which I ask this year in beer and spirits while leaving the wine duties at their present low limit. And if the Committee will allow me to remind them what the present rates of duty are, I think they will realise that there is room for an addition without any serious effect upon consumption. I could not under any circumstances expect that the wholly phenomenal clearances of last year would continue, but I think there is room for an increase—a substantial increase—in the wine duties without any greater fall in the consumption than I might otherwise have expected. The present rates for wine are 1s. 3d. a gallon for light wines and 3s. for heavy wines. In addition there is a surtax on wine imported in bottle of 1s.
per gallon on still wine and 2s. 6d. on sparkling wine. The wine duties thus work out at 2½d. a bottle on light wines, and 6d. a bottle on heavy wines, such as port and sherry, imported in cask. The surtax represents a further 2d. per bottle on still wine in bottle and a further 5d. a bottle on sparkling wine. These figures, I suggest, show a margin for further taxation. I propose to double all the wine duties and further to impose a special duty on sparkling wine. It will be seen from the figures I have given that the total duty now payable in respect of a bottle of sparkling wine is 7½d. Even after doubling the duty as I now propose, this figure only becomes 1s. 3d. and it is wholly disproportionate to the very high retail prices which are not only asked but obtained for these sparkling wines. I think they may well bear a heavy increase. But it has often been urged that the duties should bear a closer relation than at present to the relative value of the commodities taxed. I propose therefore that in addition to doubling the existing wine duty a 50 per cent. ad valorem duty should be levied on sparkling wines imported into this country. The average duty payable on a bottle of champagne at present import prices would be under my proposal about 6s. I am informed that a new class of champagne drinkers has come into existence since the War. They are not confined to any one stratum of society. It has been suggested to me that a new class of champagne has come into existence to meet their demands. If so, both consumers and consumed will in future I hope contribute to our revenue. By these proposals I expect to obtain £3,800,000 in the present year and £4,100,000 in a full year. The ad valorem duty on sparkling wines accounts for £1,800,000 of these figures in the current year, and for £1,900,000 in a full year.

IMPORTED CIGARS (AD VALOREM DUTY).

Sparkling wines are not the only objects of luxury on which I think in present circumstances we may make a call, and which can afford to bear additional taxation. There is another commodity—imported cigars. Hon. Members are aware that imported cigars have been the subject of a special surtax for many years, which has been increased from time to time with the increase of the tobacco duty. Even to-day it amounts only to 2s. 2½d. per lb., representing only a
trifling proportion of the price at which expensive cigars are sold to the public. But imported cigars are of many qualities. Some are luxuries; some are not. It is clear that it would be unfair to tax at the same rate the cheapest Indian cheroot and the most expensive Havana cigar. I propose, therefore, in the case of cigars, as in the case of sparkling wines, that the additional duty should be levied in the form of an ad valorem duty at the rate of 50 per cent. The existing surtax of 2s. 2½d. would remain. Taking an average on the figures for 1919, the 50 per cent. duty would represent a duty of 15s. per lb. on Cuban cigars, and allowing for preference, a duty of 1s. 4d. per lb. on Indian cigars. It is estimated that this would yield £500,000 in the current year, and £530,000 in a full year. I propose that, as in the case of sparkling wines, preferential rebate on imported cigars should be at the rate of one-third, which is the rate now in force with regard to the ad valorem duties imposed in 1915. After allowing for the repeal on January 1st of the petrol duty, and of existing motor licences, I thus obtain from Customs and Excise an increase of £48,650,000 in the current year, and of £54,730,000 in a full year. I do not propose to ask any more from that source.

DIRECT TAXATION—STAMP DUTIES.

I now come to direct taxation. I have already mentioned that the stamp revenue has shown an unexpected expansion. After a period of eclipse during the War it has now not only recovered but has doubled its pre-war volume. For the year 1913–14 the receipts from stamps were approximately £10,000,000. In the calendar year 1919 they reached £18,700,000, and in the financial year just closed they yielded £22,500,000. The only increase of any stamp duty during the War was the doubling of the stamp on cheques by my right hon. Friend the Leader of the House, which took effect from the 1st September, 1918. This duty produced in 1919–20 a revenue of approximately £3,000,000—that is the whole receipt—which compares with £1,300,000 in 1913–14 and £1,350,000 in 1917–18. That is a very satisfactory result, on which I again congratulate my right hon. Friend and which I think disposes finally of the contention that the imposition of the additional duty of a penny has led to a diminution in the use of the cheque
and an increase in the inflation of the currency. With this exception, the whole of the increased receipts—and I come now to the information for which my right hon. Friend the Member for Paisley asked me—have been obtained on the old rates, and they are substantially concentrated under two heads of charge, conveyance on sale duty and duty on companies' capital.
Conveyance on sale duty, including transfers of stocks and shares, has risen from approximately £3,000,000 in 1913–14 to £9,500,000 last year. Companies' capital duty has increased from £700,000 to £3,400,000 in the same time. I think that these figures justify an increase of that duty. It will be recalled that the Finance Act of 1909–10 introduced a discrimination of charges payable on sale, leaving transfers of stocks and shares liable, as in the past, to 10s. per cent., but doubling the rate (except for small transactions) on conveyance of other properties, principally land and houses. I do not propose that the latter should be further increased, but in the circumstances of to-day I see no justification for maintaining the discrimination set up by the Act of 1909–10. Therefore, I propose to assimilate the duty on the transfer of stocks and shares with that on other conveyances by raising it to 1 per cent. I expect from this source an increase of revenue of £1,500,000 in the current year, and of £2,000,000 in a full year. As a consequential change the duty on marketable securities and on share warrants to bearer will be doubled, producing in the current year an increase of £300,000 and in a full year £500,000.
Companies' capital duty offers a more difficult problem. Some appreciable part of the flood of registrations that has recently appeared is no doubt due to the suspension of all flotations during the War. At the same time the expansion has been so enormous and so continuous that at present and for some months past registrations have been effected at twice the rate that obtained at the beginning of 1919, and, making all reasonable allowance for the operation of temporary causes, a substantial permanent increase remains. I propose to increase the duty from 5s. to £1 per cent., and in order to avoid the serious loss of revenue which would otherwise occur, I ask the Committee to give effect to the increase from the date of the resolution this evenings.
I expect from this source an increase of approximately £3,000,000 both this year and in a full year.
Receipt duties I ask the Committee to double. This change does no more than reflect the altered value of the penny. It will mean an additional £275,000 this year, and £550,000 in a full year. For the same reason, this small change from 1d. to 2d. will be made in the duty on Scrip Certificates. The increased yield from this source will be small. The duty on policies of insurance against fire and accident I propose to raise from a penny to sixpence, yielding an additional £50,000 this year and £100,000 in a full year.
One further alteration in stamp duty is proposed. At the present time the duty on sea policies increases with every £100 of the amount insured. This involves a long range of stamp denominations which, it is represented, is highly inconvenient to those who are concerned. I propose to remedy that inconvenience, and at the same time to bring in some additional duty to the Exchequer by changing the points at which the duty increases, so that instead of rising for every £100 it will, with suitable adjustments of the rate, rise only with every £250 up to a total insurance of £1,000, and in cases where the insurance exceeds £1,000 for every £500 only (or portion of £500) of the amount of the excess. The amount of the additional revenue is £75,000 this year and £150,000 in a full year. If these proposals are approved by the Committee I shall obtain from Stamps an additional yield in the current year of £5,200,000, and in a full year of £6,300,000.

INCOME TAX AND SUPER-TAX.

I come now to Income Tax and Super-tax. I do not propose to make any alteration in the standard rate of Income Tax, which is now 6s. in the £, but very important questions arise as to the remodelling of this tax, the premier tax of the United Kingdom. I do not think that the Committee will consider that I am guilty of any excessive praise if I say that the report of the recent Royal Commission marks an epoch in the history of the Income Tax in this country. Everyone who has read it will appreciate the great debt which we all owe to Lord Colwyn and his colleagues for the very careful inquiry which they have carried
out and the valuable recommendations which they have made. It is my intention to submit to Parliament as early as possible a Bill to give effect to the recommendations of this Committee, but all the recommendations are not of equal importance, and not all of them carry the same measure of authority. On one of these, that relating to the taxation of co-operative societies, opinion was fairly evenly divided, though it is not the least remarkable achievement of Lord Colwyn and the Commission that every Commissioner signed the report, and that the reservations are few and comparatively unimportant. On this point, and on some others, I hope the Committee will allow me to reserve my judgment, as hon. Members will doubtless wish to reserve theirs, until the proposals are actually before us.
It is quite clear that I cannot deal with the whole of this immense and complicated subject in the Finance Bill, which is subject to statutory limitations as to the time allowed for discussing its different stages. Many of the recommendations go to the root of the system of the Income Tax, and for practical reasons, even if I could include them in the Finance Bill, they could not be brought into effective operation in the year in which they are passed into law. Accordingly, subject to important exceptions, to which I will come in a moment, I have decided that the general reform of the Income Tax is a matter which calls for a separate Bill. That Bill will be introduced as soon as possible. The matter is difficult and of a complicated character, and I hope the Committee will bear in mind that both the Inland Revenue Authorities and myself are pretty fully occupied just now, and will be patient if we are not able to bring in the Bill at a very early date. We shall bring it in as early as we possibly can.
In the Finance Bill I will deal only with those recommendations of the Royal Commission which relate to the graduation of the tax and the various allied measures for better adjusting the burdens to the taxpayer's back, and with the recommendation respecting the very important question of Double Income Tax within the Empire. I propose to adopt, with one or two trifling modifications in favour of the taxpayer, all the recommendations of the Commission on the
subjects which are being included in the Finance Bill, that is to say in regard to differentiation and graduation of the tax, and I use the term "graduation " to include the various reliefs associated with family responsibility. The details of the system as set out in the White Paper will be in the hands of Members when I have finished, and I hope the Committee will not require me to go further into them at this moment. Broadly, as will be seen from the graphs which accompany the White Paper, the effect of the new system is to eliminate the sudden jumps which have hitherto been an unfortunate element in our Income Tax scheme and to produce an effective rate of taxation which, in the case of the individual taxpayer, progresses uniformly as his income increases. Moreover, it readjusts the burden in such a manner that a certain portion of the charge hitherto borne by the smallest incomes is transferred to the larger and largest incomes.
It will be seen also from the White Paper that under the new system greater regard is had to the taxpayer's marital and family responsibilities. For example, in the case of wholly earned income married couples with no children will pay no tax until their income exceeds £250, and will pay a tax at a smaller rate than now up to nearly £800. Married couples with children fare even better. Even in the higher ranges of income up to £8,000, the rate is for the most part lower than the present rate, though at certain stages there is an increase due to the avoidance of the sudden jumps of which I have spoken. At the same time the case of unmarried persons of more limited means is not overlooked. The exemption limit is raised from £130 to £150 in the case of earned incomes, and these do not become chargeable at an increased rate until they exceed £300. It will also be observed from the White Paper that the severity of the burden on the small investment income has been mitigated.

SUPER-TAX.

The Super-tax is an essential element of our Income Tax system, and the scale which the Royal Commission has put forward, and which I propose to adopt, Is an integral part of the new scheme. I do, however, suggest one small development in the progressive rate which the
Commission have recommended. I propose to make an addition of sixpence to the rate applicable to the excess of income beyond £30,000 a year. There seems to have been an apprehension, or rather a misapprehension, current that the effect of the recommendations of the Royal Commission in regard to Income Tax and Super-tax is to provide me with a large additional revenue. That is quite the contrary of the case. The net cost of the changes in the present year will be £2,700,000; in a full year the net cost will be £18,200,000—a very serious loss which I should not be prepared to recommend the Committee to sanction if I did not see my way to make it good by adopting other recommendations which the Commission have made. In other words, the Commission have sought so to frame their Report that when the whole of the recommendations were carried out there should be neither loss nor gain to the revenue on balance, but that there should be a fairer distribution of the burden between the various classes of the community subject to it. Special rates of tax and other Income Tax reliefs were allowed as a War measure for soldiers, sailors and others. They will, of course, now cease, and so will the other temporary reliefs which were introduced to meet special circumstances arising out of the War. The saving of revenue from that course will be £2,000,000.

DOUBLE INCOME TAX.

Finally, in respect of Income Tax, I propose to deal with the difficult problem of double Income Tax within the Empire. War conditions here and in the Dominions and War taxation produced such a measure of hardship that temporary relief was afforded by a section of the Finance Act of 1916, which, although admittedly only of a stop-gap character, did afford at the expense of the United Kingdom Exchequer considerable relief from the double burden. At the same time promise was made by my predecessor, or by the Government as a whole, that as soon as possible after the War the whole question should be investigated. This investigation naturally formed part of the work entrusted to the Royal Commission, and I am happy to say that they have been able to find a solution of this troublesome problem. The Commission have unanimously approved the recommendation made to them by a Sub-Committee, and
I propose to adopt it. The Report of the Sub-Committee is included as an Appendix in the printed Report of the Commission. It shows that Australia, Canada, India, Newfoundland, New Zealand and South. Africa sent representatives to the conferences, who, with one exception, were prepared to recommend the solution to their respective Governments.
Shortly, the proposal provides that when within the Empire the same income is taxed twice, usually because it is enjoyed in some part of the Empire other than that in which it arises, the lower Income Tax should be eliminated by the countries concerned respectively remitting proportions of their tax equal in the aggregate to the whole of the lower tax. Between the United Kingdom and the Dominions it is proposed that relief should be afforded by the reduction of the rate of the United Kingdom Income Tax, including Super-tax, to one-half of the rate of tax charged upon the taxable income, and that the balance of relief, if any, should be given by the Dominion concerned. Thus in the case of a taxpayer charged in the United Kingdom at the rate of 5s. on income which is also taxed in the Dominion at the rate of 3s., the relief from the United Kingdom Income Tax will be at the rate of 2s. 6d., that is, one-half of 5s., and the balance of relief, namely, 6d., necessary to eliminate altogether the lesser of the two charges, will, under the terms of the proposal, be afforded by the Dominion in question. The Commission's Report shows in great detail, by several examples, the actual working of the scheme. I confidently hope that the Dominions will adopt the proposal and make relief complete by similar action on their part. In any case, I propose to put the alteration into operation forthwith. Where the Dominion rate of tax does not exceed one-half of the United Kingdom rate, the relief will, for reasons explained, be complete. The present relief costs the Exchequer £2,000,000 a year. The additional charge to the Exchequer involved in the more extensive relief now proposed will be be another £2,000,000 in a full year, making £4,000,000 in all. For the current year the total cost of reliefs will be £2,500,000.

Mr. C. PALMER rose

The CHAIRMAN (Mr. Whitley): Will the hon. Member put later any questions he has to ask? It is very unusual and very undesirable, in the case of the Chancellor of the Exchequer's first statement, to interrupt him.

EXCESS PROFITS DUTY.

Mr. CHAMBERLAIN: I come now to the Excess Profits Duty. I attempted last year to state fairly the arguments for and against the Excess Profits Duty when I asked the Committee to continue it for another year at a reduced rate of 40 per cent. But there was one factor in the situation which I have to confess I entirely failed to forecast. If hon. Members will cast their minds back to the circumstances in which I spoke last year, I do not think they will blame me or pretend to greater prescience. Industry was then disorganised, unemployment was rife, and there was every prospect of declining prices and a great fall in profits. But the results have been far otherwise. There has been no such decline; on the contrary, manufacturers are overwhelmed with orders in excess of what they can execute. Prices have risen and the level of profits has still further increased. Had I foreseen this situation there would have been no such large reduction in the duty last year, and the Committee will not be surprised to learn that in view of it, and subject to one condition, which I will explain, we propose not only to continue the duty for another year, but to increase it as from 1st January last, not indeed to the 80 per cent. rate at which it was in force in 1917 and 1918, but to the 60 per cent. at which it was fixed in 1916. I base my justification for that proposal on the continued prevalence of temporary conditions occasioned by the War or arising out of the War, creating a state of scarcity, hardly distinguishable in effect from monopoly, and giving capital engaged in industry wholly abnormal and often extravagant profits. I propose to increase the rate subject to one qualification. The qualification is this. As the Committee is aware, a Select Committee of this House is now enquiring into the practicability of a levy on War increases of wealth. If, when they have completed their deliberations, the Committee make recommendations to the House, and if Parliament should decide later in the
year to impose such a levy, the funds thus made available will relieve the pressure of the financial situation and enable us to reverse the decision to increase the rate of Excess Profits Duty to 60 per cent. I shall propose, therefore, if it falls to my lot to submit to Parliament a Bill later in the year to make a levy on the increases of war wealth, to cancel this increase of the rate of Excess Profits Duty, and collect Excess Profits Duty for the year at the existing rate of 40 per cent. The increased revenue that will be derived from this source in the current year, on the assumption that the rate is 60 per cent., will be only £10,000,000, raising the estimate of the total revenue from this source from £210,000,000 to £220,000,000. As I have already reminded the Committee, the main effect of any change in the rate of Excess Profits Duty is felt in the year following the change, and more important than the additional £10,000,000 in cash this year will be the further sum amounting to £65,000,000 accruing but not collected during the present year, and a still further sum of £25,000,000 receivable the year after. In other words, the addition to the Tax will produce £100,000,000 in all. This increase will involve a corresponding increase in the rate of Excess Mineral Rights Duty, a Duty which is complementary to the Excess Profits Duty.

CORPORATION PROFITS TAX.

But whilst I consider that these proposals are not merely justified but are required by the abnormal conditions now prevailing, I also hold that this tax itself, like those conditions, is, or should be, abnormal and temporary in its character. I propose therefore to introduce this year a new tax which, for the time being, will be levied concurrently with the Excess Profits Duty, but which, either in the form in which I propose it or in an amended form, may in the future prove a substitute for it. The character of the new tax, a permanent tax, has been the subject of most anxious consideration by the Government and myself and, as I have previously mentioned in the House, last year I sent out a mission to Canada and the United States to investi-
gate and to study the schemes of Profits Taxation in force in those countries, and to see whether we could derive any lessons of use to us from their practice and experience. The results of the inquiry and of independent investigation in this country have not served to remove the difficulties which presented themselves on our first consideration of the proposal for a taxation of profits in excess of a certain return upon invested capital, and have not enabled us to see our way to adjust such a tax to existing business conditions and customs in this country. We, therefore, abandoned the idea of creating a tax on profits in excess of a fixed standard and we propose to have recourse to a different measure. I may describe our proposal as a Corporation Tax levied at the rate of 1s. in the £ on the profits and income of concerns with limited liability, engaged in trade or similar transactions. This tax will run concurrently with Excess Profits Duty until that Duty is repealed. Where a concern, is liable to both taxes, any Excess Profits Duty payable will be treated as a working expense in arriving at the profits for the purpose of the new tax. Both Excess Profits Duty and Corporation Tax will be deducted before the assessment of profits for Income Tax, and to prevent the new tax constituting too severe a burden on the ordinary shareholder of existing concerns in which there are large issues of debenture and preference shares, where a considerable proportion of the profit has to be allocated to the payment of interest and fixed dividends thereon, we propose that in no case shall the duty exceed 2s. in the £ on the profits which remain after the payment of such interest and dividends on existing issues of debentures and preference shares. I would remind the Committee that under the provisions of the Excess Profits Duty prosperous concerns with a large pre-War profit standard may escape liability for the tax because their present profits, though high, are not in excess of their standard, and, at any rate, they pay tax on what all of us think an unduly low scale. Incidentally, the new tax will do something to correct this anomaly But I justify it on much broader grounds. Companies incorporated with a limited liability enjoy
privileges and conveniences by virtue of the law for which they may well be asked to pay some acknowledgement. But more than that, partners in a private partnership pay Super-tax not merely on the profits which they divide, but also on the undivided profits which they place to reserve. No such charge falls upon the undivided profits of limited liability companies. The Corporation Tax is justified by this distinction of the existing law in favour of such corporations, and it may be regarded as a composition in lieu of the liability to Super-tax. How soon it may be possible to discontinue the Excess Profits Duty and to rely upon this new tax alone must depend on many circumstances, upon the duration of the abnormal conditions and abnormal prices and profits which we now witness, but, most of all, on the results of the inquiry which the Select Committee on War Wealth is now conducting upstairs. I estimate, on the basis of existing prices and rate of profits and assuming the continued development of industry, the yield of the new tax by itself should in a full year amount to £50,000,000 and, while levied as an addition to Excess Profits Duty at the rate of 60 per cent., will in a full year produce £35,000,000. The largest part of the tax levied and accruing this year will not reach the Exchequer till next year, and for this reason. I do not anticipate that the sum obtained in the current year will be more than £3,000,000.

FINAL BALANCE SHEET, 1920–21.

These changes which I have mentioned will produce in a full year £198,230,000 or, excluding £9,500,000 drawn from the Post Office, £189,000,000 derived as to £125,000,000 from direct taxation and £64,000,000 from indirect taxation. In the current year they will give me an additional revenue of £76,650,000, making a total revenue in the current year of £1,418,300,000. At the close of the year we shall have outstanding assets to the following amount: Loans to Dominions, £119,500,000; loans to Allies and for relief, £1,767,000,000; or, taking them as in former years at one-half that figure, £883,500,000; the remaining liability of India for 5 per cent. War Loan, £21,000,000. To these must be added
Vote of Credit Assets (£300,000,000), of which a portion may still be required to meet Extraordinary Charges, and Excess Profits Duty payable after the close of the current financial year of £400,000,000, making total assets of £1,724,000,000, in addition to reparation payments by our late enemies, the amounts and times of which cannot well be fixed. Whatever they are and whenever they are obtained, these will form an additional reserve for the reduction of debt.

6.0 P.M.

In the current year, therefore, the expenditure, exclusive of Sinking Fund, amounts to £1,184,102,000, and we are providing for a revenue of £1,418,300,000.This gives me approximately £234,000,000 for the redemption of debt this year, or a Sinking Fund equal to 3 per cent. of the total debt. Of this £234,000,000 available for the reduction of debt, over £70,000,000 will be available for the reduction of the Floating Debt, after meeting all maturing liabilities, without reborrowing, except by the continued sale of Saving Certificates. Nor is that all. As the result of these changes, there is every prospect next year that there will be available for the reduction of debt a sum of £300,000,000, of which one-half at any rate should be free for the Floating Debt, and with the advent of a "Normal Year," when temporary and extraordinary receipts and charges have both terminated, and on the assumption that the Excess Profits Duty has also been brought to an end, there should be available for the Sinking Fund a balance of not less than £180,000,000. We were told on Saturday that two such Budgets might destroy the Empire. I will not stop to retort that twenty such Budgets would redeem the whole of our debt. I am content to say that after such a war as that in which we have been engaged, and after such gigantic financial sacrifices, this is a position of unexampled and unequalled strength. It is true that to attain it we are obliged to impose fresh taxes and to call for further sacrifices. That may not bring popularity to the Government or to the Minister. I am proud to say that we have not sought it. Our object has been to rise to the level of our great responsibilities, so that when we surrender the Seals of Office we may leave to our successors an ample revenue and to our country a national credit second to none.

CUSTOMS AND EXCISE.

Continuation of Duties {Customs).

Motion made, and Question proposed,
 That the duties of Customs specified in the first column of the following table which were imposed by Part I. of the Finance (No. 2) Act, 1915, and continued in Section one of the Finance Act, 1919, in the case of the new import duties until the first day of May, nineteen hundred and twenty, and in the case of other duties until the first day of August, nineteen hundred and twenty, shall continue to be charged as from those respective dates until the dates specified as regards the said duties respectively in the third column of the said table:—


Duty.
Section of Date Finance (No.2) Act, 1915.
Date to which Duty continued.


Increased duty on tea …
1
1st August, 1921.


Additional duties on dried fruits.
8
1st August, 1921.


Additional duty on motor spirit.
10 (1)
31st December, 1920.


New import duties …
12
1st May, 1921.


And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913.

Mr. ASQUITH: In accordance with our well-established Parliamentary custom, the first night of the Budget is given, not to contention, and I think not even to criticism, but so far as it is necessary to elucidation of the proposals made by the Chancellor of the Exchequer, and I am very glad to be able, after listening as the Committee has listened with absorbed interest to the prolonged, but not too prolonged, statement of my right hon. Friend to say that, so far as at any rate I am concerned, the demand for further information is very easily satisfied. I have listened to a great many Budget statements in this House during the last thirty odd years; I have made some myself, but I have never listened—I can say it without any flattery or undue exaggeration—to a statement which covered so much ground with greater lucidity and with more persuasive argument. I congratulate my right hon. Friend very heartily on the manner in which, as I knew he would, he has achieved a task of almost unexampled difficulty. I am not going to say anything this afternoon in regard to the
financial situation disclosed by the Chancellor of the Exchequer, either as it bears upon the past or as, in the light of the proposed new taxation which he asks the House to assent to, it presents itself in the forecast of the future. That survey, which must be made, had better be reserved according to custom until either to-morrow or the next day, whichever the Government suggests. I quite agree, in view of the proposals of the Chancellor of the Exchequer, that it is essential that he should get some of his resolutions to-night. Obviously those resolutions which involve the imposition of new Customs duties must receive the provisional assent of the House at once in order to prevent forestalling and other familiar evasions. I say provisional, because of course the House always has the matter in its hands afterwards. Therefore I do not suppose there will be any opposition whatever or any undue delay in giving the right hon. Gentleman such of his resolutions as are essential for that purpose. What I want to ask him is upon what resolution he thinks it would be most convenient to take what I think is the practice for you, Sir, to allow to be taken—a general discussion of the financial statement as a whole. In past years we have had it, I think, on the Tea Duty, but it does not matter really what duty is selected for the purpose so long as we know what it is and when it will be taken, and I would ask my right hon. Friend if he would give us that information at once, and we should do wisely to ruminate over his statement.

Mr. CHAMBERLAIN: A larger number of Resolutions than usual are necessitated by the proposals I have unfolded to the Committee. Of these there are several, such as those relating to increased Customs taxes, spirits, both Customs and Excise, beer, Customs and Excise, wines and cigars, and the proposal as to the capital of companies, which I must get to-night for revenue purposes. There are many others which I hope the Committee will be willing to give me to-night, provided that the opportunity for a full discussion is left open. I believe in recent years it has been customary to take the general discussion on a proposal for the general amendment of the law, "that it is expedient to amend the law on Customs and Excise." If that satisfies my right hon. Friend, I shall be very glad
to do that. I quite agree that it would be for the convenience of the Committee that serious discussion should not be taken before to-morrow, and my hon. Friend the Financial Secretary to the Treasury will, I have no doubt, be good enough to show what the Resolutions are to the right hon. Gentleman or to any other hon. Member interested, and we can arrange amicably perhaps what shall be taken this evening. I should like to take as many as possible, and I think it would be for the convenience of the Committee to see the Bill as soon as they can.

Sir W. J0YNS0N-HICKS: Can the right hon. Gentleman say when he proposes to introduce the Bill for the changed taxes on road vehicles? The petrol duties, I take it, have to be taken to-night or to-morrow. But may I take it that the Bill will be introduced by the Minister of Transport, and, if so, when? The second question I wish to ask is in regard to the alteration in the tax on life policies, accident and marine. I take it that will not be taken to-night, as it will probably create some feeling, and I think it would only be right that the City should have some time to consider it.

Mr. CHAMBERLAIN: I must take the Resolutions to-night or to-morrow, but that does not exhaust the opportunities for discussion. As regards the petrol duty, it will be included in another Bill introduced by the Minister of Transport, and he himself will be prepared to deal with the Resolution relating to petrol. I am quite ready not to take them till to-morrow if my hon. Friend prefers. If, on the other hand, he will let me have them sub silentio to-night he can raise the discussion on the Report or in the general discussion.

Sir W. J0YNS0N-HICKS: If it will meet the convenience of the Committee I shall be quite willing to take them sub silentio to-night, on the understanding that we may discuss them on Report.

Mr. HOUSTON: Can the right hon. Gentleman make the corporation tax quite clear, as I am afraid he did not make it clear?

Sir J. D. REES: May I ask about the double taxation? Is it the case that there will be deducted the rate of the Dominion
tax, subject to the limitation that the maximum rate for relief should not exceed one-half of the rate of the United Kingdom tax? If that is so, that would be quite satisfactory to the double taxpayer in India and in England, but it would leave the Australian taxpayer still under a serious disability. If such a one paid State Tax and Federal Tax in Australia, and was taxed at home Income Tax and Super Tax, his deduction might only amount in the maximum to 3s., and he would would still be taxed up to 12s. in the £.

Mr. PALMER: Does the right hon. Gentleman intend to say anything in the matter of separating the incomes of married persons for assessment purposes?

Mr. CHAMBERLAIN: I hope I made plain both matters upon which my hon. Friends have put questions, in the speech I have just made. If not, perhaps they will go to the Vote Office, where I think they will now find the White Paper for fuller explanation. I do not pretend that where the Dominion Income Tax exceeds half the United Kingdom Income Tax there can be absolute and complete relief at the expense of the United Kingdom Exchequer. If there is to be absolute and complete relief, something must be done— a portion of the relief must be given by the Dominion Treasury in addition to that which is given by the United Kingdom Exchequer. I think the amount of the relief which I propose to give, as regards the United Kingdom Exchequer, will not be ungenerous. As regards the question put by the hon. Member for Liverpool (Mr. Houston), the tax will be charged on profits, after the deduction of excess profits duty, subject to the limitation, in the case of existing concerns, of 2s. in the £ of the amount available for the ordinary shareholder, after payment of debenture interest and fixed preference dividend. Then the hon. Member for the Wrekin Division (Mr. Palmer) asked me whether I had intended to say anything as to the separation of the income of husband and wife. No, I do not propose to add anything on this occasion to what the Royal Commission on Income Tax said on that subject. I am in entire agreement with the Commission on the point.

Mr. MACMASTER: Shall we have any opportunity of discussing that question?

Mr CHAMBERLAIN: When we resume the general discussion to-morrow, or it can, alternatively, be discussed on the Second Readingof the Finance Bill, in Committee on the Finance Bill and at subsequent stages. I am sorry to say that Budget proposals seem to offer no limit to the opportunities on which discussion can take place.

Mr. BOTTOMLEY: Has the right hon. Gentleman formed any idea as to when his Finance Bill will be introduced?

Mr. CHAMBERLAIN: I cannot say. I have first to get my Resolutions, and the Bill has to be drafted to square with the Resolutions. I will introduce it as soon as I can after the Report of the Resolutions.

Sir F. BANBURY: I understand the feeling of the Committee is that the serious discussion on the Budget should be deferred until to-morrow. But I think, so far as my recollection goes, it has generally been the custom to say a few words upon the financial aspect of the Budget as introduced on the first day, and I should like to offer a few observations upon this very important Budget. First of all, it deals with very startling figures. Speaking in round numbers, I think we have a Revenue of nearly £1,500,000,000 and an Expenditure of something like £1,200,000,000—an enormous Revenue and an enormous Expenditure immediately after the Great War. We had thought a year ago that, at any rate, there would be some relief to the burden of the taxpayer, but I do not see any prospect of relief under this Budget. On the contrary, I see very considerable additions to the burden already borne. I would like to say one or two words upon what are really minor matters, but which have some bearing upon the Budget. I am very sorry to see that there is to be no reduction in the Land Valuation staff. Really, the first thing which this House ought to do is to save money. It is easy enough to come down and impose enormous taxation, and to say by the imposition of this enormous taxation that we are going to redeem debt. But, first of all, I think some effort should be made to reduce expenditure, and I see very little effort in this Budget to reduce expenditure. On the contrary, though the Land Values are going to be done away with, of which I am extremely glad, and I would congratu-
late my right hon. Friend and the Government upon what they have done, still, I think they ought to have followed it up a little more and done away with the staff. It is all very well to say that the staff is going to save money, but, at any rate, we managed to get taxation before by better, or perhaps I may say, more remorseless methods by the officials of the Treasury.
Then there is another point on which I really hope the Committee will pause a little, either now or later on, before they endorse the Budget, and that is the question of the Post Office. The Post Office, as I understand it—I could not quite follow the figures—which before the War yielded a revenue of £6,000,000, now has a deficit of £11,000,000. There is an amount of £29,000,000, apparently, in expenditure, chiefly in wages, which has been added. I want to ask how long is this going on? How long are we going to increase wages in this way, and then come down and say that somebody else has got to pay for it? There must be a limit to this. This expenditure cannot go on. No sooner do they get an advance than they require something more. No greater proof of that can be found than when a settlement was come to last year with the railway-men, and now they ask for another pound a week. This sort of thing goes on, and as soon as the Post Office people receive an enormous increase, everybody else wants it, not because they want it, but because the Post Office has got it. The result is that a very great burden is put upon the middle classes with a fixed income, in order to pay what I venture to say—I know it is unpopular to say it, but I believe it to be absolutely true—is an exaggerated wage, which ought not to have been paid.
I come to the question of the wine duties, about which I have not much to say, except that I am afraid they will not be very popular with our Allies. Then I would refer to the stamp duties. I would ask my right hon. Friend whether he has really considered what the effect of increasing the duty upon registered stock from one-half to one per cent. will be? I am afraid it will utterly destroy the market in these stocks. The half per cent. duty always was very heavy, and did to a certain extent prevent a free market in these stocks, and if you make it one per cent.,
it is not, I understand, going to bring in a very large amount, but it will be a very considerable deterrent to a free market, which is especially essential if money is to be raised. I hope my right hon. Friend will be inclined to retain an open mind upon this matter, if adequate representations are made to him, to show that the tax is likely to do harm. I come to the Income Tax, and, so far as I can understand, married couples without children with an income of £250 a year are to be exempt. I think that is a mistake. So far as I know—I have not had time to look up the figures— out of 20,000,000 voters in this country, only about 2,000,000 are subject to Income Tax. Under this proposal, which I hope will be reduced very considerably, an enormous preponderance of voters in this country will impose a tax on a very small minority. I think that is a very great mistake. All statesmen in recent years have acknowledged that one of the evils of democracy is when the many impose taxes on the few, and I should have thought a far better way would have been to lower the exemption limit, I do not say to put any large tax upon them, but to bring in more people to feel the burden of the Income Tax, and then they might be a little inclined sometimes to support and recommend saving. With regard to Income Tax and Super Tax, I have often endeavoured to get them combined. I think it is far better that people should know what is being paid by the richer classes. At the present moment a very large number of people are paying half their income to the State, irrespective of death duty. I am not speaking of people with £40,000 or £50,000 a year, but of people with far less. They are paying half to the State without rates, death duties and the various burdens which fall upon people. I do not think that is realised, and I think it would be far better if the Super Tax were done away with and the Income Tax were raised to a corresponding amount.
I want to say a few words upon the Excess Profits Duty and the company tax. I am sorry that the Government have determined to increase the Excess Profits Duty. I was rather in hopes that they would reduce it. It does not in any kind of way affect me personally. I have
been long out of business, and, so far as I am personally concerned, I have no interest in it. But I really believe that, after economy, which I hold to be the first essential, I believe the next chief essential is the encouragement and prosperity of trade and business. Naturally those of us who see manufacturers, shipowners, and others all making large sums of moneys are always a little bit inclined, human nature being what it is, to be slightly envious. But they are doing good to the country. The more rich men there are in the country the better for the country, and greater opportunity should be given to the people to make money. I am rather afraid the Government have lost sight of that. I remember the senior Member for the City of London, my esteemed colleague, saying once from that Bench when he was Prime Minister, and someone on the other side had said something about rich people, that what we are suffering from is not too many rich people, but too few rich people, and that, I believe, is absolutely correct. What the Government ought to do is to encourage the making of profits, and not to discourage it. I am very much afraid the continuation of this Excess Profits Duty, especially the raising of it, will do very much to discourage all businesses, and especially the new businesses which have only been started during the last three or four years. So far as I remember, they are only allowed practically a very small sum before the Excess Profits Duty comes in. They are in an exceptionally hard position, and I think a great number of them have looked for relief in this matter. I sincerely hope my right hon. Friend will keep an open mind on this matter.
I would like to ask my hon. Friend the Secretary to the Treasury a question. The Chancellor of the Exchequer has told us that the result of the Budget will be that there will be £234,000,000 available for the redemption of debt. What guarantee have we that that £234,000,000 will be spent in the redemption of debt? Last April the Chancellor of the Exchequer brought in a Budget, and between then and October he had to revise it on account of the extravagance of the Government. The Government have got this £234,000,000; are we quite certain that they will keep it for the redemption of
debt, or that they will not spend it upon other matters dear to the hearts of some of them? I notice in the Blue Paper an enormous increase in the Civil Service Items. Education has gone up from £38,000,000 to £56,000,000; the Ministry of Health from £12,000,000 to £34,000,000; the Ministry of Labour is down, not very much, but just a little, and so on. The increase in several of these items is tremendous, and I am very much afraid that some of this £234,000,000 may be taken to deal with other matters, which should not be encouraged. My hon. Friend is not in a position, of course, to give any undertaking, but I hope he will repeat to the Chancellor of the Exchequer the words I have said. I do not quite know what the new position of my right hon. and learned Friend (Sir L. Worthington-Evans) is, but if he represents no Department perhaps he will promise me to keep an eye upon this £234,000,000, and see it is spent in the manner for which we are invited to pass it to-day.
The only other thing I desire to do is to mention the question of the company tax. I do not quite understand whether this is to be a tax to rank upon all profits or only upon excess profits, or rather, I should say, profits larger than before the War. If it is a tax upon the first, it is practically an increased Income Tax upon a very large number of people, or profits. The tendency at the present moment is for firms to become limited companies, and under this proposal they will have to pay a sum which may amount to 2s. in the £1 upon their profits. That may be all right, but it is practically another Income Tax, and it is putting a very heavy burden on certain classes. On the whole I am rather inclined to hope that we will not have many more Budgets like this. I do not want to criticise it too much, but the Chancellor of the Exchequer said that 20 Budgets like this would redeem the National Debt. I should not like to contradict my right hon. Friend for a moment, but I think in the meantime the country would be ruined by those 20 Budgets. They would leave nothing for anybody except possibly the Labour party, and I do not think there would be very much left for them. I do not know whether my hon. and gallant Friend opposite would succeed in retaining a little.

Colonel WEDGWOOD: Oh, his salary

Sir F. BANBURY: But I am afraid the result would be very serious for the nation. I can only repeat that I should have been much more pleased if the Chancellor had been able to say that the expenditure for the coming year would be reduced rather than that he should say that the income would be increased. We all know what happens to the spendthrift. We know what happens to a man who has £1,000 a year and spends at the rate of £3,000 and suddenly by an accession of wealth finds he can increase that thousand. He does not save above the thousand, but goes on to spend at the rate of £4,000 a year. I am rather afraid that if the Government find that it is so very easy to get money that something of the same effect will be produced upon them, and that, instead of encouraging economy, the accession of wealth will encourage expenditure.

Sir W. PEARCE: I am afraid the general effect of the Budget must be to increase the cost of living, and to that extent I must say that I think it is very disappointing. It may have been impossible to avoid this heavy expenditure, but the taxes as a whole as proposed today do seem to me to tend, without doubt, to accelerate the pace of the unfortunate position in which we find ourselves. There are only two ways to stop that unfortunate position. The one is to reduce the expenditure, and the other to reduce the purchasing power of the people. Whether this Budget may affect something in reducing the purchasing power of the people—not of champagne—remains to be seen. The ultimate effect will be to continue the rise in prices, to continue the increased cost of living, and so to continue the agitation for higher wages. I hope I am not unduly pessimistic, but this seems to me to be the effect of the Budget proposals. I am a member of a Committee on which a good deal of responsibility has been cast to-night. As I understand it the Excess Profits Duty is to be increased to 60 per cent., subject to the possibility of a capital levy on War work. In regard to the Corporation Tax, I do not quite know what the Chancellor said. I understood him to hint that unless something was done in the way of capital taxation, a 1s. Corporation Tax might be imposed. This again throws a certain amount of responsibility on the War Loans Committee by the suggestion.

The FINANCIAL SECRETARY to the TREASURY (Mr. Baldwin): I think I remember what the Chancellor of the Exchequer said. He did not make any reference to the work of that Committee with which my hon. Friend is connected. His reference was to a Corporation tax. The only point he made about the future was that if there was a possibility of abolishing the Excess Profits duty that he hoped a Corporation tax would take its place. But he said nothing about the scale at which that duty might be.

Sir W. PEARCE: I think I understand the explanation, and really the responsibility of my Committee is that the Excess Profits duty, which will be 60 per cent., may be reduced to 40 per cent. again, in the event of our finding a satisfactory solution.

Sir D. MACLEAN: I should like to ask the Financial Secretary to the Treasury a question. Am I right in understanding that it is the intention of the Government that a general discussion should take place upon the Resolution referring to the alteration of the law, with the Chairman of Ways and Means or the Deputy Chairman, to-morrow, and also on Wednesday? If that is so, then I think, subject to what experienced Members, like my right hon. Friend the Member for the City, may suggest, that it would be a convenient thing if we left these Resolutions to take their first stage to-night, because it is only by this means that we can get them on the paper. We shall then have all the information as to how the matter stands. We have got it so far as the Government can at this stage give it to us. If these Resolutions are on the Order Paper tomorrow, the discussion can be resumed in a wide general sense, and also on Wednesday

Mr. BALDWIN: If the Resolutions are passed to-night, the only Resolutions that come into force are those that bear a specific date. When we come to the last Resolution, it will be put as well, but will be so put as to have the effect of continuing the discussion which we wish to continue. We propose to continue the general discussion in Committee tomorrow. If the Committee thinks that that is an insufficient time, we shall provide for continuing the discussion further on Wednesday. The Report stage of the Resolutions will be taken in the ordinary course within about ten days of their passage through Committee.

Commander BELLAIRS: Has the matter to have the concurrence of the Chairman before the arrangements for continuing the general discussion takes effect?

The DEPUTY-CHAIRMAN (Sir E. Cornwall): That has been agreed to.

Sir F. BANBURY: I have no objection to that, but I should like to have it quite clearly understood about to-morrow. My hon. Friend said something about Report to-morrow.

Colonel WEDGWOOD: The discussion will be continued on Wednesday.

Mr. BALDWIN: We will continue the discussion on Wednesday if necessary. What I said about Report stage was that it followed naturally within about ten days.

Colonel WEDGWOOD: Apart from the taxation on champagne, I think the Committee will agree that the best part of this Budget is the nominal repayment of debt to the tune of £234,000,000. Let me in passing refer to the practical way in which the Budget will increase the cost of living, though I will not criticise or comment upon it. In the first place, as I understood the Chancellor of the Exchequer, he is not including in the £234,000,000 the annual charge of some £15,000,000 that ought to be allocated for the payment of interest for War-saving Certificates. Indeed he is simply taking the War-saving Certificates, increasing their capital amount to 20s., and charging the whole of the five years' arrears of interest on these certificates as an additional debt. This £15,000,000 should be provided for out of revenue. Secondly—and this I am not quite so clear about—the Chancellor said that our external liabilities amounted to £1,278,000,000, most of which is owing to America. I am not quite aware whether the interest on that debt is being taken into account or whether we are also funding the interest on that debt, and adding it to the capital debt. If so, we have to take £60,000,000 or 5 per cent. on that £1,200,000,000 odd from the £234,000,000 before we get a proper idea of the position. Therefore, the admirable situation as painted by the Chancellor must be modified to the extent of the £75,000,000 to which I have referred. That brings down the payment of debt to a more
honest figure. That is not all. The Committee will have observed that in the same way that we are paying Death Duties in Victory Loans, or funding loan. So that really the financial position is nothing like so sound as it would appear on the face of it to be from the speech of the Chancellor of the Exchequer. The real vice of this Budget is that although additional revenue is raised in order to make both ends meet, the revenue is raised in a way which will inevitably increase the cost of living. Take the Corporation Tax, because that is an admirable example of how not to raise revenue. The Corporation Tax is an income tax of anything up to 2s. in the pound on those who have their money invested in ordinary stock. At the first blush it may seem right that those people should pay a little more Income Tax, but I cannot understand why all the landed interests should be exempted, and this extra Income Tax should be reserved for stocks and shares. It is a tax which falls upon ordinary shares and not upon debenture or preference shares. The ordinary Income Tax, if increased from 6s. to 8s., would fall upon the debenture and preference shares, and that would not lead to any additional cost of living. If this tax is reserved for the ordinary shares it will be immediately transferred in toto to the consumer, and this will add to the cost of production and will not by any means fall upon the holders of fixed securities, and consequently the cost of production everywhere will be increased and the cost of living will go up.
Not only that, but the policy advocated by the Independent Labour Party is in many ways diametrically opposed to the policy put forward by the Chancellor of the Exchequer. We want a capital levy on all wealth in order to pay off the debt en bloc. The object is to appreciate the currency in order that the paper pound may again approach par value and equal the golden pound. We have an absolutely sound policy for the reduction of the cost of living by the reduction of debt, and thereby securing an appreciation of the currency and a recovery in the value of the pound. We are told that the Government can do nothing whatever to reduce the cost of living but they could do it tomorrow by dealing with the taxation on tea, sugar, and coffee. If they were really anxious to do this, all they have to do is
to remove those indirect taxes which press upon large families, and the poorest people in the country. If they really want to reduce the cost of living those should be the first taxes they should do away with. Instead of this we have increased taxes upon beer which will fall very heavily upon the working classes, and will add everywhere to the cost of living. My principal objection to this Budget is not that it increases the cost of living, but because it is above all things a land owners' Budget such as we should naturally expect to see introduced by the party opposite. The Budget not merely abolishes land value duties when the value of the land has gone up by at least 50 per cent. owing to the War and owing to our men fighting in Flanders, but the Increment Tax itself should now be bringing in an enormous revenue to the Treasury. This has all been washed out owing to the action of the Government in not collecting those taxes and abolishing all arrears. Not only have they abolished the land duties, but they have taken no steps to substitute a straight tax on land values for the variegated taxes which were introduced in 1909–10. We had no love for these land value duties when they were imposed, but we accepted them because it was the only way to get a valuation, consequently the Government are reversing the policy of previous years. This Budget is framed in the landlords' interest. The right hon. Gentleman and his friends did not like the valuation. The Corporation tax falls upon everybody except the landowners, and therefore everybody else must pay an increased Income Tax. The Corporation tax is an additional Income Tax, which amounts to 2s. in the pound on the ordinary holders of stocks and shares, and it is specially devised so as to exempt landowners from its purview, and consequently the farmer and the landowner escape. Therefore this tax is really an additional Income Tax, which has special reference to those engaged in trade and commerce, and a burden which they will transfer to the backs of the consumers. The stamp duties are increased enormously for everybody except the landlord, because the stamps on the transfer of land will remain as they were before. Take the Road Tax. Liability for roads is an hereditary burden upon the owners of landed property, subject to which they bought their land and held it. The land-
lords are relieved of this charge; £8,000,000 a year from the Motor Tax is used to remove this hereditary-burden from the landowners' shoulders. This is just such a Budget as we might expect from the landlords' interest. Then the right hon. Gentleman tries to make things square up by saying that he will retain the Land Valuation Department, in order to bring in a general valuation, but, frankly, I do not believe we shall ever get a valuation of this kind from the Coalition Government. At any rate, we should be more surprised than delighted if we did get it, because such a valuation will meet with all the careful opposition, and even more careful amendment, than the Budget of 1909–10 met with. I am afraid we shall have to wait for some future Government before the Land Valuation Department at Somerset House will be put to any useful purpose in connection with this valuation.
I am sincerely grateful to the Chancellor of the Exchequer for having at any rate done something to start the repayment of debt, but the additional taxes have been raised in such a way as to add to the cost of living, and no satisfactory Budget can be introduced until there is a general capital levy so that the paper pound may approach the old value of the gold pound, and until we get back to pre-War conditions and sound finance. Until the repayment of debt is faced in that way we cannot possibly reduce the cost of living. The Chancellor the Exchequer has made a beginning, but it is not one which will reduce the cost of living, because the taxes he has put on will increase the cost of living. The stamp tax and the Corporation tax all add to the cost of production and will increase the price of necessaries. If we could get a tax upon land values which would not add to the burden of industry, but would bring land into the market and cheapen land all round and enable people to get their raw materials cheaper, then you would benefit industry, but along the lines of the Budget there can be no salvation for this country.

7.0 P.M.

Sir SAMUEL ROBERTS: I should like to say a few words about this Budget. In the first place I desire to congratulate the Chancellor of the Exchequer upon his very able and lucid statement. I have
listened to a great many Budget statements, but I have never listened to one which has been so well-delivered as the one we have heard this afternoon. I congratulate the right hon. Gentleman upon the state of the revenue and the way the revenue has come in for the last year is simply marvellous. We have collected £1,339,000,000, which is £450,000,000 more than the preceding year. This has exceeded the Budget Estimate by £138,000,000, and the revised Estimate by £171,000,000, and now comes the disappointment. The right hon. Gentleman said that upon the present basis of in come and expenditure he expected to have £164,000,000 to spare. When he made that statement we thought we were going to get off with no extra taxation at all. I could not quite understand how the right hon. Gentleman managed to absorb this £164,000,000. I believe he said that he would start afresh in order to establish a balance to commence extinguishing the debt, and the amount he estimated in a full year for this purpose was £198,000,000. He proposes to raise £125,000,000 from direct taxation, and £64,000,000 from indirect taxation. It is rather interesting to note what has been done during the War in the matter of increasing taxation. In the year 1914 the total taxation of the United Kingdom equalled £189,000,000. To-day it equals £998,000,000, or five times as much as in the first year named. Again in 1914–15 the Customs and Excise produced £80,975,000. To-day it produces £283,000,000, or an increase of over three times. In 1914–15 Income Tax produced £69,000,000. To-day it produces £359,000,000, or five times as much. No other country has increased its taxation to anything approaching this extent. France, I believe, has only just begun. But in this country during the five years of War the proportion of the costs of War paid out of taxation equalled 26 per cent. In this year, which has been, up till March last, a period of "winding-up" the War, the proportion paid from taxation nearly equals 60 per cent. The taxation amounts to £998,000,000 as against an expenditure of £1,665,000,000.
Now I come to the relationship between direct and indirect taxation. Direct taxation, including the Excess Profits, but excluding Stamps, contributed £693,000,000,
or 70 per cent., as against 67 per cent. last year. Indirect taxation, including Stamps, contributed £305,000,000, or about 30 per cent. The proportion of direct taxation has gradually increased from 53 per cent. in 1914–15 to 70 per cent. Direct taxation has gone up from £108,000,000 in 1914–15 to £693,000,000, or six times as much. Indirect taxation has gone up from £80,000,000 to £395,000,000 in the same period, or three-and-three-quarter times as much. This 70 per cent. is contributed by but a small class of the population. Income Tax, Excess Profits, and Estate Duties are generally estimated to be paid by about 2 per cent. only of the population. In other words, 2 per cent. of the population bears 70 per cent, of this taxation without counting any consumption of articles indirectly taxed.
The Chancellor of the Exchequer talked about the Floating Debt. We have been fortunate during the past year in being able to reduce that Floating Debt by £100,000,000, and it is in a better position to-day than a year ago, because then the Treasury Bills amounted to £957,000,000 and the Ways and Means advances to as much as £455,000,000. The Ways and Means advances now represent a very much smaller figure, and, in fact, the right hon. Gentleman told us that on the 31st March they had been practically wiped out. It has been suggested that the increase in currency notes is responsible for high prices. I do not think that is the case. Prices began to rise immediately on the outbreak of War. There was a scarcity of both labour and commodities. The wages bill doubled. There was simply a world shortage, and the laws of supply and demand demanded more currency in order to pay the higher wages and prices. But it is quite a mistaken idea to say that the issue of currency notes has been the cause of the rise in prices. Suppose you artificially reduced the number of Treasury Notes, the result would be that you would simply stop the banker doing his duty to his customers. I should like to quote what was said by Sir John Bradbury on this point:
I should say that the whole of the rise in prices is due to the operation of supply and demand, treating currency as a commodity.
On this same subject John Stuart Mill wrote:—
The favourite explanation of the rise and fall of prices from 1819 onwards, and especially since the financial crisis of 1825, has been the currency, and like most popular theories the doctrine has been applied with little regard for making it correct.
There is a great misunderstanding and want of clear thinking in regard to the issues of currency notes. These notes are issued for value received from the bank by the Bank of England and are absolutely necessary in order to pay the enhanced wages and prices. The amount issued depends on the amount standing to the credit of each bank with the Bank of England. The only way they are not issued in exchange for value is when credit is given to the Government on Ways and Means advances which, in ordinary times, was merely an expedient of the Government of the day to obtain credit in anticipation of receipts from taxation. All other banks are restrained from granting credits in this way by the ordinary requirements of bankers to keep sufficient of their funds liquid. In my opinion these notes have come to stay for some considerable time, if not permanently, and the only result of their compulsory withdrawal would be that the banks would not conduct the business of the country.
There was one other point with which the right hon. Gentleman dealt, and that was the habit which fortunately our working people have of saving money. The right hon. Gentleman told us that during the four years of War, thanks to the excellent work of the War Savings Committees, no less than £400,000,000 of War Savings certificates were sold, and that only £38,000,000 had been withdrawn. I have worked these figures out, and find that approximately it representes 45 certificates per family in the United Kingdom. Nearly 20,000,000 of our population are in one way or another interested in Government loans. I believe the total amount which the small investors now hold ranges from £600,000,000 to £800,000,000, and I sincerely hope that the Chancellor of the Exchequer will do all he can to encourage the people to go on saving, because the money will be wanted, and we cannot do without it. The more that. State loans are held by our people all over the country the safer is the State. There is one point which he might very well consider, and that is whether he
could not pay a somewhat higher rate of interest in view of the fact that rates for money have already gone up. Treasury bills now pay 6½ per cent., and the War Bands work out at an even better figure. It is not quite reasonable to expect poor people to be content with 5½ per cent. under the present circumstances, and I hope the right hon. Gentleman will consider that.
I think there are unmistakable signs that the country is settling down to real work. Labour is doing so. I am not sure, however, about the position in the City. I have been told by a distinguished man there that financial matters are not likely to settle down until we get a definite declaration from the Chancellor of the Exchequer as to whether or not he intends to make a capital levy. If the right hon. Gentleman will only make up his mind on that point he will do more than anything else to bring about financial stability. The Board of Trade returns for the first three months of this year are simply magnificent. The exports amounted to £295,000,000, an increase of over 100 per cent. as compared with the same period last year, and a large part of this increase was made up of manufactured goods, which fact shows that the country is getting to work. In March the increase was £50,000,000, of which the most satisfactory figure was £40,000,000, representing manufactured articles of every class. I hope that no steps will be taken by the Government, either in conjunction with this Budget or by any other means, to upset the equilibrium of Capital and Labour, but that they will do all they possibly can to encourage a good spirit which we trust is now prevailing among all classes to patriotically do their very best for the general well-being of our country. I am afraid, however, there will be a feeling in some parts that my right hon. Friend has been too courageous and too anxious to pay off the debt quickly. He spoke of a period of twenty years. I should have thought that forty years would not have been an unreasonable period in which to pay the debt off.

Mr. CHAMBERLAIN: If my hon. Friend will allow me, may I say that what I pointed out was that with such a Sinking Fund as is proposed in this Budget it would be possible to pay off the debt in twenty years? But I never contemplated that when the first great
reduction of our debt had been made the country would continue to make the abnormal annual sacrifices of the kind we are now calling upon it to make. Then will be the time to reduce our demand.

Sir S. ROBERTS: I should like, in conclusion, to quote a sentence from a speech made by Abraham Lincoln, just after the conclusion of the American Civil War—
 Let us strive on to finish the work we are in; to bind up the nation's wounds; to care for him who shall have borne battle, and for his widow and orphan; to do all which achieve and cherish a lasting peace.

Sir J. HARMOOD-BANNER: I should like to congratulate the Chancellor of the Exchequer on the clear manner in which he has explained his Budget. I am sure the manufacturers and traders of this country will be only too glad to assist him in every possible way to reduce the debt and improve our finances, but I should like to express, on behalf of the manufacturing and trading community, the very great regret that he is retaining the Excess Profits Duty, which is a most wasteful tax. I know a man who, when he used to send his clerk to London, used to give him a £5 note to pay his expenses. Now he never sends him with less than £50 or £100; because he says, "I shall charge it against Excess Profits, and it does not matter." That is a principle which is generally applied towards the Excess Profits Duty. You can go wherever you like, or you can experiment and be as wasteful as ever you like, simply because it comes out of the excess profits, of which the Government will take 40 per cent. The manufacturers have made representations to the Chancellor of the Exchequer to get rid of this tax, because of its wasteful nature, and they have suggested to him other methods, including, I think, a tax on turnover and the tax which he has now adopted. The extraordinary thing is that, instead of complying with their request to abolish the Excess Profits Duty, he keeps it on, and also adds the tax which they have suggested should take its place, so that they are going to be made to pay twice over, when they consider that the one tax would meet the case and put trading in its proper position. If you get rid of the Excess Profits Duty you have to pay Income Tax, which is 30 per cent., and that 30 per cent., plus the 2s. tax on
the ordinary stock of all companies, is going to punish traders and manufacturers, probably, to the extent of 50 per cent.; but they are still left subject to to Excess Profits Duty also. They would have met any extra amount which the Chancellor of the Exchequer might have suggested by way of a tax on trading profits before the declaration of dividend or on turnover; but to have to pay Excess Profits Duty and then to be subject to this scorpion in the shape of the duty which they themselves suggested for the purpose of getting rid of the Excess Profits Duty cannot possibly meet with the approbation of the trading community, however much they may desire to help the right hon. Gentleman.
There is another matter which requires discussion and explanation, and that is the affinity between this present Budget and the proceedings of the Committee which is sitting upstairs. As I listened to the right hon. Gentleman, he seemed to me to think that we were to be under the fear of another Budget next August or September, upon which we shall have to pay further taxes. At any rate we are now informed that, in addition to this Budget, heavy as it is, we are to be under the lash of another Budget, which, apparently, is going to be forced on by Somerset House, and, I fear, by the Chancellor of the Exchequer as well, next August or September. Can stability in business be expected, can confidence be expected in the City, can it be expected that the price of Government Loans and of new issues of Government Stock for purposes of housing will be kept up, when there is not only a heavy Budget— which would have been readily enough accepted if one could have walked off with the feeling that it was the end of what one had to face—but an additional lash which is to come upon us next August or September.

Sir HERBERT NIELD: I share with the hon. Member for the Ecclesall Division (Sir S. Roberts) the opinion that it is unwise to push the country too hard at the present moment, when we are staggering under the debt which the War has forced upon us. If we look back in history, we see that 30 years peace was secured by "Waterloo. Surely we have a right, unless the Peace Treaties are going to be violated and not enforced, to expect a somewhat similar period of peace, or even that war may cease altogether by
reason of the League of Nations. If we are going to have anything like a repetition of our experience at the beginning of the 19th century, we have a right to ask posterity, or at any rate the next generation, to share very considerably the burdens which have been put upon us owing to the War. I should have nothing to say about the proposals in relation to the Excess Profits Duty and the further Corporation Tax, if I were not seriously disturbed by what I believe to be the practice of manufacturers and traders, namely, to pass this burden on to the persons who deal with their goods, and who, in turn, pass it on, plus their own burden, until finally the consumer has to pay portions, at any rate, of several persons' Income Tax and Excess Profits Duty. It seems to me that some steps ought to be taken to try and arrest that practice. Those who have investigated allegations of profiteering have been told, and have discovered by their examination of the figures, that those taxes are added as a business expense Such a statement was made, I think, last Friday before the County of London Appeal Tribunal. The matter was a small one, but it is small matters which tell what is in the minds of those who are concerned in the trade of this country. A trader was ordered to repay an amount representing an excess charge upon a hat. She appealed to the London Appeal Tribunal, who, while reducing the amount of the surcharge, dismissed her appeal; and she immediately asked: "How are we to pay our taxes unless we can put them on to the price of the article? There is one case in which the tax cannot be passed on, and that is the tax which a tenant pays under Schedule A, and which he is entitled to deduct from his rent. I suggest that, if we are to grapple with this question of high prices, we ought to see how far this principle, which the Treasury have adopted for many years in relation to Schedule A, could be put into force with regard to the passing on of taxes in other cases The Chancellor of the Exchequer may have better information than I possess, and may brush my suggestion aside, but it seems to me that you cannot examine the question of high prices, with all its attendant mischief amongst the population, without finding that it is in some measure due to the passing on of a portion—I will not say the whole—of taxes which ought to be
borne by the individual trader. I see no reason why the professional man should have to pay the full limit of a tax, while the trader is able simply to pass it on. There is evidence that this is done, in the increased use of motor cars and other forms of enjoyment, which is so much more rife now than it was even eighteen months ago. In face of that and other evidence, one cannot but come to the conclusion that persons engaged in trade, even in relatively small businesses, are able to-day to indulge in the enjoyment of things which were hopelessly beyond them in times gone by. It can only be that they have made inordinate profits, and have been enabled to pass on their burdens to somebody else. I represent a district in which, I suppose, there are more retired persons living upon pensions payable, either by the Indian Government or by the Home Government, in respect of services rendered in India or the Dominions, than in the district represented, probably, by any other hon. Member of this House, except, possibly, the hon. Member for Cheltenham; and I constantly receive the most piteous appeals from people whose incomes have been reduced to a minimum, by reason, firstly, of taxation, and, secondly, of the high cost of living. I desire to ask the Chancellor of the Exchequer whether, in his proposals for graduation, when he speaks of married people, he includes the widow with children? I hope he does, because the widow who is left with children to bring up is surely entitled to just as much consideration as married people with children.

Mr. CHAMBERLAIN: A widow or widower with children would be entitled to relief in respect of the children, but would not be entitled to relief in respect of there being two married people to keep on the one income when there is only one.

Sir H. NIELD: I think that is a very fine distinction, because a widow is so placed that her income cannot be enlarged. Where there are two married people, even supposing that the wife does not work, the man's income is probably capable of expansion, and I should rather hope that the right hon. Gentleman would consider that a widow so placed should be in no worse position, and should have the benefit of whatever deductions are made in respect of married people. A man, for
instance, would be entitled under that scale to deduct in respect of his wife doing the housework, or in respect of a housekeeper, if he happened to be a widower and had to keep a housekeeper. I do not see why that should be confined entirely to men, because a woman, trying to get her living, may have to work, in which case it will be necessary to find someone to do the work of the home.

Mr. CHAMBERLAIN: My hon. Friend has misunderstood. Men and women will be treated exactly alike.

Sir H. NIELD: If it amounts to the word "men" including women in the construction of the Budget, I have nothing more to say. If it meant that a person living single, as a widow with children, is to be treated differently from two people living together, the husband making the income and the wife looking after the children, it would create a very serious inequality.

Mr. CHAMBERLAIN: I am sorry I cannot make the position clear to my hon. Friend. Men and women will be treated alike, but neither a man nor a woman, if single, will be treated as if he was double.

Sir H. NIELD: A widow surely cannot be regarded in the same category as a single woman.

Mr. CHAMBERLAIN: She would be in the same category as a widower.

Sir H. NIELD: A widower with children will be able to get the allowance for a housekeeper, a widow presumably will not be able to, even though she has to go out and earn her living. It is a very serious matter. However, I will not go further into it, but I wish to point out the chances of very grave injustice unless these points are considered at the outset before the actual Resolutions are taken and the Bill is introduced, and I think the right hon. Gentleman will do well, in view of the great hardships under which people live at present, to take care that widows shall not be prejudiced.

Mr. REMER: I wish to associate myself with those who have expressed disappointment at the Budget, more particularly that portion of it which increases the Excess Profits Tax. To-morrow morning, when the business community have had
an opportunity of expressing their opinion, they will be bitterly antagonistic to the Budget as a whole. If we come to examine the Excess Profit Duty we shall find that it is grossly unfair to young traders with new concerns which have sprung up in the last 5 or 6 years. The Excess Profit Tax puts long established traders into an entrenched position, but it does not give the poor man any chance of increased success, or of progress, and in the case of a poor man who starts a business of his own, his hard work only results in payment of taxes. A further reason why I am opposed to the Budget as it has been explained to us, is that it puts on to limited companies, and particularly small limited companies, a multitude of taxes which it is very difficult to understand. I am sure the business community would rather have one Income Tax than a multitude of taxes. For example, a company when it gets its balance sheet out at the end of the year, first of all has to pay Excess Profit Tax on the balance; it has to pay the new Corporation tax, then Income Tax, and then the individuals in the company have probably to pay Super-tax as well. That causes a great deal of inconvenience and trouble to the business community as a whole, and it will not result in the prosperity and employment which everyone would desire.
It is most important to reduce the National Debt, and particularly to reduce the floating debt, but I do not think it is at all necessary that it should be reduced at the alarming rate which is proposed, or that such an extraordinary reduction should take place in this year. Posterity will get a great advantage from the War, and it ought to be left to pay a considerable share also. I am not conversant with the money market, but I am sure it is like every other market, and looks at the commodities either from the point of view that the market has got no top to it, or that it has got no bottom to it, and either things are going to an absurd height or to absurd depths in price. It is the same with the money market. At present things are bad. The Chancellor cannot fund his floating debt. Once the money market finds that the Chancellor is getting over his difficulties, as it is proved by his statement that he is, suddenly without any warning the market will come into a quite different position. There are always plenty of
Jeremiahs in any market, and I am sure the money market is not different from any other type of market which may exist. We saw some of it in the Sunday press yesterday. The article which expressed doubt on the solvency of the nation has been proved by the Chancellor to be absolutely ridiculous. But it is not necessary for the right hon. Gentleman, in order to prove his solvency, to pay such an enormous amount of the floating debt or the National Debt. All that is wanted, in order to enable him to fund the National Debt, is national confidence. I am sure he is not going to secure that by putting a huge increase on to the Excess Profits Tax and by the Corporation tax. What he wants is to get one taxation, and to try to be as moderate as possible in the amount he is going to pay off. It is only by that means that he can secure the national confidence which is the great desire at present.

Lieut.-Colonel PICKERING: I wish to express my regret that the Chancellor of the Exchequer has seen fit to increase the Excess Profits Tax. I feel sure it is going to have the effect of immediately sending up prices and it is bound to affect the cost of living and merely continue this vicious circle which will give the working classes an excuse for applying for higher wages. I represent a constituency the chief product of which happens to be cloth. I am interested in a concern in which I have taken no active part since August, 1914, except on the occasion of the last Budget when the Excess Profits Tax was reduced from 80 per cent. to 40 per cent., when I gave directions that this difference should be, given to the consumer. I, therefore, should have been equally justified in giving directions now for the price to be increased to absorb the increase which the Chancellor has put on. In the process of making a suit of clothes, the number of businesses which are engaged amounts to 7 or 8. To commence with you take the wool merchants. Then the wool goes to a top maker, from the top maker to the spinner, from the spinner to the manufacturer, from the manufacturer to the dyer, from the dyer to the merchant and so on to the tailor, and finally it comes on to the person who buys the suit. That means that the Government is having seven or eight different dips into the pocket of each of those concerned, who will put it on to each other, and the consumer finally
has to pay. It is very unfortunate indeed that this increase should have to come on at this juncture, because manufacturers generally have been anxious to reduce prices and to stabilise the cost of living, and in many instances there have been arrangements made whereby they could give a certain proportion of their output, produced at an exceptionally low rate, to make certain grades of boots, cloth and so on cheaper in order that those who are poor and needy might be able to get clothes at a reasonable figure. The effect of this increase from 40 per cent. to 60 per cent. will do away with that kind of scheme and the result will be a great loss of confidence in business and an immediate increase in prices.

Mr. G. TERRELL: The continuance of the Excess Profits Duty will be a very great disappointment to all engaged in manufacture. There will be a feeling of the most intense disappointment and particularly a feeling of resentment at the idea of increasing the tax. The tax was agreed to as a War measure. Manufacturers were quite prepared to submit to anything which was necessary for the purpose of winning the War. It was purely a War tax, and, moreover, the first year after the Armistice it was reduced to a half, and we had every reason to expect that this Budget would have seen it entirely swept away. It was a thoroughly bad tax from the start. It was a stupid tax, because it found its way on to the goods which were produced, and did it in the most extravagant manner and added enormously to the cost of production. When, in times of peace, it is proposed to continue it, the right hon. Gentleman will find the very greatest opposition to it. We realise the necessity of raising revenue, but raise it equitably. Do not single out one class of the community, the producers, and put a burden on their backs which is going to hamper and harass them. Just at the moment there is a shortage of goods all over the world. We have practically little competition for our products. The markets of the world are able to absorb anything we can send to them, but that position may change in the next few months, and if you put a burden on industry which is going to increase the cost of production, and will increase the cost of all goods manufactured in this country, you will find you are doing something which is
unsound and unwise, and which may very seriously, at a later period of the year, affect the employment of labour. The continuance of the tax will be vigorously resisted.
I should like to ask whether the right hon. Gentleman proposes this year to assess Income Tax on the basis of the three years' average, or is he going to adopt for this year the recommendations of the Royal Commission? I hope he will see his way at once to drop the three years' average. It has operated very unfairly, it has proved unequal and it has hit some firms which have made big profits during the War, and which are now perhaps making no profits. I hope he would say something, but as he has not done so, I trust he has preserved an open mind on the subject, and if he cannot state that this three years' average is to be dropped forthwith at any rate he will reserve his decision until he hears evidence on the matter.

Mr. CHAMBERLAIN: I am afraid it is physically impossible to get the machinery ready for this year. That is one of the provisions I propose to include in the Bill dealing with the general recommendations of the Committee. Even if I could get it now, I do not think I could bring it in this year.

Mr. TERRELL: I do not think there is any difficulty, because the right hon. Gentleman levies his revenue on last year's profits instead of taking the average of the past three years.

Mr. CHAMBERLAIN: I am at least as anxious as the hon. Member to bring it into force at the earliest possible moment, because it would be profitable to the revenue. I gave instructions that it should be done, but it was reported to me that it would probably involve 15 Resolutions. Therefore I think the hon. Member will see that it is a more complicated matter than he thinks.

Mr. TERRELL: I quite understand that it is easy to make suggestions on the floor of the House, but it is often very difficult to give effect to them by legislation. I realise that the assessment of Income Tax has been established for many years on the principle of an average, and you get a continuity of practice which makes it so much easier. In spite of that difficulty, I should have hoped that it would have been possible to
assess each year on the profits of that year, so that people who made profits in one year could pay their share to the revenue and get rid of the contingent liability. I hope the Chancellor of the Exchequer at a later stage will be able to deal with this matter.

Mr. JAMESON: On the whole, so far as one can comprehend a Budget of these vast dimensions, I think it is a Budget that people will like, so far as they can like a Budget which imposes taxation of this kind. It is, at any rate, honest in that it tries to meet the situation and to meet it manfully. Britain during the War dealt with the situation manfully in man-power and in money, and now it must foot the Bill manfully when it is presented. I wish the Chancellor of the Exchequer could see his way to abolish the exceptional taxation that was put on in the emergency of the War. I mean, in the first place, the Excess Profits Tax, and I think the Corporation Tax falls in the same objectionable category. This form of taxation falls under two criticisms. In the first place, it is apt to be capricious in its incidence, and in the second place it is apt not to hit the person that it really aims at. The person at whom the Excess Profits Tax aims is the rich merchant or the rich manufacturer, but the person whom it really hits is the poor consumer every time. That is the objection to this form of taxation. On the other hand, the form of taxation by direct Income Tax, although it is not a pleasant thing when it comes in, is the most honest kind of tax. It hits the person it is aimed at, or it is most apt to do that. I was very glad to see that this Income Tax is being made full use of as the foundation tax in the British system of taxation, and, in the second place, I must congratulate the Chancellor of the Exchequer on having the courage to add 6d. in the way of extra graduation to the recommendations of the Commission. Reading the Report of the Commission, one was rather disappointed to find that the graduation stopped at the figure of £20,000 a year income. I gather that at that figure the graduation in the new Finance Act will stop. Upon a single man's income, the graduation will stop at something like 10s. 6d. on an income of £20,000 a year. That, more or less, I think, is the correct view. There is no doubt that, although £20,000 a year is a very much larger income than most
of us enjoy, there are a good number of very much larger incomes than £20,000 a year, and I submit to the Chancellor of the Exchequer that he might try to get a little more out of these very gigantic incomes.
The amount of incomes that are above £100,000 a year has nearly doubled from the year 1909 to the year 1919. In America, and, I think, in Canada, these 'very high categories of income are taxed as much as 15s. 6d. in the pound. If any people know the habits of the millionaire, it is the Americans, because America is the native country of that species of fauna, the millionaire; but they do not adopt the argument that is often put forward here, that the millionaire will stop amassing money and will dispose of his capital if you tax him as much as 15s. 6d. in the pound. On the contrary, they think that this very large taxation will encourage him to amass more. As a matter of fact, he must amass more. It is at one time his business and his amusement. It is the only thing he can do. Probably his money is rolling up, and in that case he has got into the habit of amassing money on a vast scale, and you may be sure he will go on, and a big Income Tax will not discourage him. I understand evidence was laid before the Commission by the British Chamber of Commerce and the Inland Board of Revenue, that something like £15,000,000 or £10,000,000 a year could be brought in from a very steeply-graded Income Tax upon incomes in excess of £20,000 a year. I suggest that that method might be used to bring money to the Treasury by a very direct and honest method of taxation, and perhaps relieve people at the other end of the scale. There is always a great temptation for people to suggest forms of taxation which hit a person a good deal above themselves. It is obvious from my appearance even, and certainly from anyone who knows me, that I am not speaking as a multi-millionaire, and that I am pleading for the taxation of those a great deal above me in the income level; but I think the principle is sound, that the broad back should bear the big burden. Accordingly, I suggest that this form of tax might be usefully applied to bring in a good deal more into the Exchequer.

Mr. RAFFAN: I am quite sure that when the Chancellor of the Exchequer made his statement in regard to the Land
Values Duties, he hardly expected that it would receive the unanimous approval of the Committee. I desire very briefly to associate myself with what has been said by my hon. and gallant Friend the Member for Newcastle-under-Lyme (Colonel Wedgwood) in regard to this matter. We are informed that although the taxation is to disappear the valuation is to remain. We are expected to derive some comfort from that. I understood the Chancellor of the Exchequer to say that the valuation would remain not only for the purpose of assisting the Government in regard to death duties, but in regard to other valuations which are necessary, and that it will provide material which will be available in the event of subsequent legislation to set up some other method of land values taxation, or in the event of an alteration in the system of rating in this country. It is quite evident that whether or not we are to derive any comfort from the fact of the valuation being continued, must depend upon the method on which the valuation is being continued. When the hon. and gallant Member for Newcastle-under-Lyme interrupted the Chancellor of the Exchequer he was informed that that was a question which had not yet been fully determined, and that full consideration was to be given as to the methods which were to be adopted. But the right hon. Gentleman did add that things were to go on as they are. It seems to me that things cannot possibly go on as they are. At the present time it is the duty of the Valuation Department to bring out figures showing the different values set up in the Budget of 1909–10, the total value, the full site value, the assessable value and so on. I can hardly understand that it is intended to continue to prepare these figures, because they are only useful for the purpose of this special taxation. Therefore, I can imagine that there would be no longer any necessity for it. But I would like to be informed whether the provisional valuations which were suspended during the War have now been completed, whether the Valuation Department has at its disposal sufficient material which would enable the Government to tell us approximately the land value of the country, and whether the Valuation Department is to continue to value separately improvements, and the unim-
proved value of the land. These matters are very vital and very material. I recognise that broadly an answer cannot be expected to a question interpolated while the statement is being made, but I should like a fuller answer to be given, if not to-night, at any rate during the discussion on the Finance Bill.
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I should like to know exactly the lines on which the Valuation Department proposes to go, and what is the work which it is to do. I and those who are associated with me would be very glad if the Valuation Department is to be continued, and if part of its work is to ascertain the unimproved value of the land, because that would be providing material upon which we could probably build in future years. To be informed that the Department is to go on as it is, inclines one to think that the Department is being continued for the purpose of camouflage only. I hope some information will be forthcoming with regard to that. The Chancellor of the Exchequer complained that he had received very little assistance in connection with this matter from the Select Committee which was set up to consider the question of land values duty. That was not entirely the fault of the members of the Committee. The question which was remitted to the members for consideration was whether these duties should be continued or abolished. I and those who thought with me who were appointed as members of the Committee were of opinion that the reference was wide enough to enable us to consider the question whether we could substitute for these duties a system of land values taxation on the basis of the system which is in operation in so many of our Colonies, and which, so far as our information goes, has worked with very useful results, but we were informed by the Chairman of the Committee—I understand that he had a consultation with Mr. SPEAKER—that that was not a matter which we could consider under the reference.
We then suggested that the Government should be asked to extend the terms of reference. While the Committee was not unanimous or anything like unanimous in making that request the Committee was unanimous in asking the Chairman to convey to the Government what the position was and ask whether the Government would so extend the terms of reference, but we were unable to
obtain from the Government an answer to that request, which was made something like six weeks before the close of last Session. We were only called together practically on the last day of the Session for the purpose of bringing forward a report when there was no opportunity of hearing witnesses, and we have never had a reply from the Government as to whether they were or were not willing to extend our terms of reference. In these circumstances it was in the power of the Government to authorise the Committee to investigate for it the question whether if these land value duties, for the reasons indicated in the Chancellor's speech, should not be continued, it was still possible to enforce the policy which has been advocated by the Prime Minister for so many years, and was approved of by the electors of the country at two General Elections in January, 1910, and December, 1910, while they were not asked at the last General Election to express, and did not express, any opinion on these duties.
It is quite true, as the hon. and gallant Member for Newcastle-urider-Lyme has stated, that those of us who have been most keenly interested in the taxation of land values in this country were not ardent advocates of these particular taxes. We agreed with them because we were informed that they were a method of getting the valuation and that that was the foundation upon which we could build; but it is true that up to the year 1914 the Prime Minister was still an unrepentant advocate of the policy embodied in these taxes. As a result of actions in the Law Courts some of these duties were difficult to collect, and immediately before the War broke out in August, 1914, the Prime Minister, who was then Chancellor of the Exchequer, was engaged in a great agitation, not for the purpose of getting these taxes abrogated, but of getting a fuller system of land valuation taxation adopted. The Chancellor of the Exchequer seemed rather amused when my hon. Friend the Member for Edinburgh suggested that when the Prime Minister returns from San Remo he will be somewhat critical of the proposals for the abolition of these taxes put forward to-day. He assured us that the matter has been a Cabinet matter, and that the Prime Minister has assented to this change. We must assume that that is so when he states it.
What does that mean? All during these years the right hon. Gentleman who is now Chancellor of the Exchequer, and the right hon. Gentleman who is now Leader of the House, were the keenest and most bitter critics of these taxes, and what it means is that they are now able to drag the Prime Minister at their chariot wheels, because nothing has occurred during the period of the War to render it less desirable that duties should be laid upon the land values of the country. We are told that these taxes are unworkable. Can it be said that the experience of the British Empire is that the taxation of land values is in itself an unworkable policy? The Chancellor of the Exchequer tells us that when he was engaged in investing the question of the taxing of war profits he sent a Committee specially to the United States and Canada for the purpose of inquiring into the system in operation there for taxing war profits. Why then, before abandoning the policy sanctioned by the electors of this country at two general elections, was a Commission not sent to Canada, Australia and New Zealand for the purpose of ascertaining how this system of the taxation of land values was working in these places?
The Select Committee was supplied with official reports from the Governments of all these Colonies with reference to the manner in which land values taxation was in operation, and in every case the report showed that the system was working smoothly and bringing in revenue, and that so far from militating against building, as we are told these taxes would do, in every case they make land much more accessible for building and for use for the purposes of commerce and industry. If the Committee had been armed with the powers, which the Chairman was authorised to state to the Government that at any rate a number of us were anxious to obtain, to investigate these methods of dealing with the problem it could have done so. But even when the Committee broke down, it was still open to the Chancellor of the Exchequer himself to make inquiry, as he made inquiry with regard to the matter of taxing war profits. As I hope we shall have another opportunity of discussing this matter, I will now simply associate myself with what my hon. and gallant Friend has said, that in this particular at any rate, this
Budget is really a Budget designed in the interests of the landlords of this country.
We all remember the eloquence with which the Prime Minister drove home to the people of this country the evils of land monopoly and how he showed that some system of taxing land values was the best method of breaking down that monopoly power. I think it was in what has become the famous Limehouse speech that he directed attention to the case of Mr. Gorringe, of Buckingham Palace Road, the proprietor of a large business, and mentioned that that gentleman had been compelled to pay a greatly increased rent upon his own improvements when his lease fell in on the Duke of Westminster's estate. I hope we shall hear the Prime Minister before these debates close as to whether he thinks incidents of that kind have passed away. Unless the circumstances have changed—I am speaking from newspaper reports—within a few hundred yards of Mr. Gorringe's premises there is an island site where there are from twenty to thirty different business men who have carried on their businesses for something like a generation, and the Duke of Westminster, after receiving what these people believed to be an offer to the very last penny they can afford to pay when the leases expired, proposes to turn them out and drive them to other parts of London where they cannot carry the goodwill of their businesses, so that he may get a very largely increased price from someone who proposes to build an hotel.
The Westminster leases will be falling in during the next few years in large numbers. I have never been one of those who joined in any special attack on dukes. Dukes are no worse than others who behave in that way. But I do think that the working people of this country are not likely to feel confidence in the finance of the Government if they find on the one hand that at this time of day the Duke of Westminster is able to exercise such tyrannical powers over business people and, on the other hand, to receive these vast sums which he has done nothing whatever to create, and that the Chancellor of the Exchequer finds this a fitting moment to throw away the weapon which would enable him to levy even a small charge upon the landlord. We will
resist to the utmost this surrender to landlord interests. We hope that when the Prime Minister returns, he will not be found to have deserted the cause which was so dear to him and which made him the idol of many people

Mr. PALMER: I disagree with the hon. Member who has just spoken. In my opinion, this is not a Budget designed in the interests of landlords. It is a Budget unwittingly designed in restraint of trade. The Excess Profits Duty will be resented from one end of the country to the other. It is a duty which will have the most disastrous effect on the industry and trade of the country, and just at the time when we need all the latitude and licence we can give to capital and enterprise. It is a Budget which will serve one very useful purpose. It will show the working people of England that inflated wages mean, not only an increased cost of living, but the increased cost of everything. No one who has listened to the statement of the Chancellor of the Exchequer with regard to the loss of the Post Office will fail to understand the risk which we are running in responding to every demand that is made for increased wages. If you realise that letters, telegrams, telephones and the parcel post are essential to the free intercourse of commerce in this country, and that, in regard to these, charges are all increased to-day, it will be obvious that there will be a greater difficulty in carrying on the business of the country.
With regard to the Land Values Department, I congratulate the Government on having at last displayed the honesty to sweep aside taxes which were never honestly and sincerely meant. I remember perfectly well the old days of the 1909 Budget, the "rare and refreshing fruit" days, when the right hon. Gentleman who is now Prime Minister was ramping and raging up and down the country and promising all the blessings of Heaven to the working classes of this country. I remember the years and years during which hon. Members in this House protested that these taxes were not worth the collecting and that the cost of collecting was a scandal. I remember the days when the present. Prime Minister justified those taxes with all the eloquence he could command. And even during the War, when some of us pleaded outside this House as others pleaded inside the House, that the Valuation Department was not an essen-
tial industry, the Prime Minister was one of the first to assert that the men who were working in that Department were in an essential industry, and that these wonderful taxes were going to relieve the country of all sorts of burdens. To me it is somewhat amusing to find at last, owing to the association of the Prime Minister with a little cold light and the cool common sense of the Unionist Members of the Coalition, he has been compelled to throw aside this grotesque arrangement and to confess before the world that the Land Valuation Department was a costly and stupid experiment.
I rose principally to say one thing with regard to Income Tax, and that is that there is throughout the country a very strong feeling that the incomes of married people should be separated for the purpose of assessment. I am sorry if I transgressed in any way the rules of the House when I interrupted the Chancellor of the Exchequer in the course of his speech. I was anxious to get some assurance from him before he left the subject of Income Tax. The right hon. Gentleman subsequently told me that he was in happy agreement with the Royal Commission on this matter. "Happy agreement" means, I understand, that he endorses the opinion of the Commission, that there is no case for the separation of these incomes. I know that in many instances in the country there is a very strong feeling that this is a grievance of which more will be heard in this House. This Budget I welcome in one sense as a lesson to the working men of this country. We all believe that Labour should be well treated, but I think Labour will see that the insistent demand it makes upon the purse of public departments is a demand that can be met only by increased calls on themselves. I wonder what the labouring men in this country will say to the penny increase on the pint of beer? We know that during the War the working man felt very keenly the restrictions on the beverage, which he has a perfect right to obtain at a reasonable cost. I rather welcome the whole aspect of this Budget because I think the time will have to come when we as a country will have to come to our senses and realise that all these demands which are made are demands which constantly come back on the people themselves. What is happening with regard to the Post Office is a
very salutary lesson to the working people of this country and it is evidence to them of what nationalisation would mean if it came about in any large form. We have nationalised the Post Office, and owing to the workers' demands there are such increases that to-day the poorest woman in this country will not be able to send a letter without paying 2d., and telegrams, which are so essential in industry, are increased to 1s. with a penny per word after 12. We are thus returning to the bad old days which we all thought had departed. Parcels have gone up, and we know how much the farmers rely on the cheap parcel post to dispose of a great deal of their goods. All these things make me, not despondent, but somewhat glad that the proposals of the Budget today are proposals of a kind which are certainly inclined to make the working classes of this country realise that all their demands for increased wages and all their claims for uneconomic awards ultimately fall back on themselves.

Dr. MURRAY: I feel bound to reinforce the protest made by my hon. Friend (Mr. Raffan) against the dropping of the Land Value Duties. I may say I am glad that the Chancellor has taken a firmer grip of the Excess Profits Duty because I believe, apart from the material aspect, the public conscience of the country demands that as much as possible of the profits made during and in consequence of the War should be brought back to the Treasury. An hon. Member remarks, "Does that apply to professional people?" Yes, I say it to professional people as well, but I do not think you will find that professional people made fortunes out of the War. When you compare those engaged in industry and those engaged in professions, I think you will find that those in industries make millions, whilst in the other case it is only a matter of scores of pounds in the year. With regard to Land Values Duties, I watched the Chancellor to-day when he was announcing the dropping of the Land Taxes, a matter which presents aspects of tragedy as well as of comedy. I did not detect anything like a funeral dirge in the language of the Chancellor over the passing of the Land Duties. He is the last man we would associate with any feeling of vengeance or vindictiveness, and we regard him as one of the most magnanimous politicians in the House, but I thought I could detect a merry twinkle
in the corner of his eye when he was telling us that he was going to drop the Land Taxes. Possibly he was thinking of some of the temporary residents of San Remo at the present time. I think in view of the tremendous agitation and convulsion through which we passed ten years ago in order to get these duties adopted by the House, the matter requires and deserves a little more explanation than the Chancellor gave us to-day.
When one thinks of Limehouse and the attacks upon Dukes and all the turmoil of those wild times of ten or eleven years ago, and now witnesses the dropping of these taxes in sombreless mood during the dinner hour, one must think that some great change has come over the House. Where is the raging, tearing propaganda we had in those years? The then Chancellor of the Exchequer, and now Prime Minister, told us that these Land Taxes would give us a new world, and would regenerate rural life, and would bring a new spirit into urban life as well, and we heard the talk of "rare and refreshing fruit." What has become of all that? The whole meaning of it is that these Land Taxes are not allowed on the other side of the Rubicon, and as a condition of the Prime Minister being allowed to become Leader of the Tory party he must drop these Land Taxes. At a luncheon at the National Liberal Club the other day the Prime Minister made a reference to Mr. Runciman strangling a political "baby," and now the Prime Minister is quite content to leave the present Chancellor of the Exchequer to strangle the " baby " of Land Taxes which he presented to the country in 1909 as the one hope of the country, and to get rid of it in any way he can. Some of the Land Values Department is to be left as a sort of cradle and relic of the Land Values Duty. I think that the Tory party have been rather merciless with the Prime Minister in insisting on the abolition of these Land Taxes, and that they might have left them as a relic of his Radical days. I am sorry that the Prime Minister takes the matter lying down, and has arranged a conference very far from here in order not to be here to see the execution of this very dear relative. The other day at the luncheon to the Prime Minister the " Land Song " was played outside, and I suppose it was the swan song of the Land Taxes, and there we
leave it. I consider that his colleagues in the Government have not been very considerate to the Prime Minister in dropping these Land Taxes, which were not taking much from the land and which would remind the Prime Minister of his Radical days.

Mr. KILEY: I do not agree that the Chancellor was well advised in continuing what he describes as the Excess Profits Tax. This is a Tax most unfair, especially to new beginners in business. Why should a new beginner be placed on a different basis to anybody else who suddenly started making immense profits. It also raises another question in regard to firms who were making huge profits before the War, but who, because they have not added to those huge profits after the War, have escaped the Excess Profits Tax altogether. I am very disappointed at the right hon. Gentleman s speech, because it seems to me he has departed from the well-established principle of taxing profits which people make, and as far as I understand the Budget to-day, it is proposed to attack businesses before they are in a position to make their profits. As an illustration take the postage account, which was formerly a penny, was then increased to three-halfpence, and now on every letter a business firm sends out they must pay twopence, while on every receipt they must also pay twopence instead of a penny, and on every catalogue of prices which they send out they must pay excess postage. If they employ motors to deliver their commodities they have now for the first time to pay a very huge road tax, whereas if they employ a pair-horse vehicle they pay no tax. Further, they will have to pay a stiffer income tax, and a new company tax, and there is the excess profits tax in addition. I have listened with some regret to the right hon. Gentleman's speech, and in Committee I shall have to make some proposals designed to bring about an alteration before the Budget becomes law.

Mr. A. J. LAW: I am sure the House will have listened to the right hon. Gentleman's speech with very great interest. It is one of the most remarkable Budgets that has ever been presented to this House, and with many of its proposals I am in entire agreement. He has dealt with indirect taxation in a very bold and comprehensive way, and the tax on luxuries, for instance, is one
to which the country probably was looking forward, particularly to those on wine and cigars, with which I find no fault whatever; but when we come to the Excess Profits Duty, that is a matter of very great concern to some hon. Members who happen to be engaged in trade. I remember a year ago that the Chancellor of the Exchequer said this tax presented anomalies and was not quite right in its incidence, and I was utterly astonished to-day that he did not propose to vary the form of that duty. In the first place, it was a war tax, but now the war is over, and in view of what the Chancellor himself appeared to promise a year ago, I think the basis of the tax should have been made more comprehensive, so that everyone liable to excess should have been brought in. It is the pre-war basis of the tax which makes it very unfair to some firms, because the Chancellor of the Exchequer has unconsciously, it seems, provided a way of escape from the tax for certain firms. Some businesses were not making much profit before the war, and it follows that anything above that is called excess profits, whereas, on the other hand, I know of companies which were making profits of 40 or 50 per cent before the war, and they now escape this duty in consequence. I therefore hope the Chancellor will see his way to making this duty more comprehensive, so that businesses which are making any profit at all will be taxed in a more equal manner, a percentage, for instance, on capital. Such a tax might bring in £460,000,000, or twice the amount named by the right hon. Gentleman. If he had adopted such means it would have been fairer in its incidence and would at the same time, I believe, have brought in a greater revenue to the Exchequer.

Mr. LEONARD LYLE: The position of voluntary hospitals is going to be a very serious one in the future, and the State may in a very short time be faced with having to pay out a very large sum of money for their upkeep, or at any rate, to help maintain them, and I would like to suggest that the Chancellor of the Exchequer might consider the claims of these hospitals. I think the best way in which it could be done would be by allowing an abatement or total exemption from Income Tax off subscriptions made to recognised voluntary hospitals. A man with, say, £7,000 to £9,000 a year
has at present to pay taxation at about 9s. 6d. in the pound. In other words, if he were to give £200 to a hospital, he must earn £380 to enable him to do so, and if, an individual could treat a donation or subscription to a hospital as a deduction from Income Tax, both Schedule D and Super-tax, a very great step forward would have been taken. I have no doubt the Chancellor of the Exchequer would say that while he would like to help these people these suggestions would diminish his income. At the same time, if that matter is considered to its fullest extent, I think it will be found that, so far from diminishing the income of the State, it would really be the cheapest way of meeting a position which will most certainly fall to be faced by the State ultimately. Of course, the loss to the State from small subscriptions would be very much less, because no doubt people who gave small subscriptions to hospitals would not bother to claim the abatement on their Income Tax. That is really the only point I wish to bring forward. I think it is well worthy of consideration. The question is bound to arise in the future, and I put it forward as a suggestion, which, I hope, the right hon. Gentleman will consider favourably.

Question put, and agreed to.

Continuation of Additional Medicine Duties {Excise).

Resolved,
 That the additional duties of excise upon medicines imposed by Section Eleven of the Finance (No. 2) Act, 1915, and continued by Section Two of the Finance Act, 1919, until the first day of August, ninteen hundred and twenty, shall continue to be charged as from that date until the first day of August, nineteen hundred and twenty-one.
And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913.

Spirits (Excise),

That—

(a) in addition to the duty of Excise now payable for every gallon computed at proof of spirits distilled in the United Kingdom there shall, on and after the twentieth day of April, nineteen hundred and twenty, be charged the following duty (that is to say):—



£
s.
d.


For every gallon of spirits computed at proof and so on in proportion for any less quantity; and
1
2
6

(b) that it is expedient that the Excise duty on spirits should be charged on spirits by whatever process manufactured in the United Kingdom as well as on spirits distilled therein.

And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

Spirits {Customs).

Resolved,
That, in addition to the duties of Customs now payable on spirits imported into Great Britain or Ireland, there shall on and after the twentieth day of April, nineteen hundred and twenty, be charged the following duties (that is to say):—



£
s.
d.


For every gallon computed at proof of spirits of any description except perfumed spirits
1
2
6


For every gallon of perfumed spirits
1
15
10


For every gallon of liqueurs, cordials, mixtures, and other preparations entered in such a manner as to indicate that the strength is not to be tested
1
10
3

And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

Beer (Excise).

Resolved,
That in addition to the duty of Excise now payable in respect of beer brewed in the United Kingdom, there shall on and after the twentieth day of April, nineteen hundred and' twenty, be charged the following duty (that is to say):—



£
s.
d.


For every thirty-six gallons of worts of a specific gravity of one thousand and fifty-five degrees a duty of
1
10
0


and so in proportion for any difference in quantity or gravity.

And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

Beer (Customs).

Resolved,
That in addition to the duties of Customs now payable on beer imported into Great Britain or Ireland there shall on and after the twentieth day of April, nineteen hundred, and twenty, be charged the following duties (that is to say):—

£
s.
d.


In the case of beer called or similar to mum, spruce, or black beer, or Berlin white beer or other preparations, whether fermented or not fermented, of a similar character—





For every thirty-six gallons where the worts thereof are or were before fermentation of a specific gravity—





Not exceeding one thousand two hundred and fifteen degrees, a duty of …
6
0
0


Exceeding one thou sand two hundred and fifteen degrees, a duty of … …
7
0
7


In the case of every description of beer other than that above specified—





For every thirty-six gallons the worts thereof were before fermentation of a specific gravity of one thousand and fifty-five degrees, a duty of …
1
10
0


and so in proportion for any difference in gravity.

And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

Wines (Customs).

Resolved,
That the duties of Customs charged on wines imported into Great Britain or Ireland shall on and after the twentieth day of April, nineteen hundred and twenty, be double those now chargeable, and that on and after the date aforesaid a further additional duty equal to fifty per cent. of the value thereof shall be charged on sparkling wines so imported.
And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913.

Cigars (Customs).

Resolved,
That in addition to the duty now payable there shall on and after the twentieth day of April, nineteen hundred and twenty, be charged on all cigars imported into Great Britain or Ireland a duty equal to fifty per cent. of the value thereof.
And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913.

Mechanically Propelled Vehicles.

Resolved,
That—
(a) the duties of excise for motor-cars now payable in the United Kingdom shall cease to be payble on and after the first day of January, nineteen hundred and twenty-one, and that on and after that date there shall be charged annually in the United Kingdom the following duties of excise in respect of mechanically propelled vehicles used on roads:—



Description of Vehicle.
Rate of Duty.


(1)
Cycles (including motor-scooters) not exceeding 7 cwt. in weight unladen:—







£
s.
d.



Bicycles—






Not exceeding 200 lbs. in weight unladen
1
10
0



Exceeding 200 lbs. in weight unladen
3
0
0



Bicycles if used for drawing a trailer or side-car, and tricycles
4
0
0


(2)
Vehicles not exceeding 5 cwt. in weight unladen adapted and used for invalids
0
5
0

(3) Vehicles being hackney carriages.

In the Metropolitan Police area and such other districts as the Minister of transport may fix.
In all other districts.


Tramcars
15s.
15s


Other vehicles:




Seating not more than 5 persons
£15
£12


Seating more than 5 but not more than 14 persons
£30
£24


Seating more than 14 but not more than 20 persons
£45
£36


Seating more than 20 but not more than 26 persons,
£60
£48


Seating more than 26 but not more than 32 persons
£72
£60


Seating more than 32
£84
£70

(4) Vehicles of the following descriptions used in the course of trade, otherwise than for the conveyance of goods, and in agriculture, that is to say:—


Locomotive, ploughing engines, agricultural tractors, and other agricultural engines, not being engines or tractors used for hauling on roads any objects except their own necessary gear, threshing appliances, farming implements,. or supplies of fuel or water
5s.

Road locomotives, and agricultural engines, other than such engines in respect of which a duty of 5s. is chargeable—


Not exceeding 8 tons in weight unladen
£25


Exceeding 8 tons but not exceeding 12 tons in weight un laden
£28


Exceeding 12 tons in weight unladen
£30

Agricultural tractors, other than such tractors in respect of which a duty of 5s. is chargeable, used for haulage solely in connection with agriculture—


Exceeding 2½ tons but not exceeding 5 tons in weight un laden
£6


Exceeding 5 tons in weight unladen
£10


Tractors of any other description
£21

(5)Vehicles (including tricycles weighing more than 7 cwt. unladen) used for the con veyance of goods in the course of trade—


Not exceeding 12 cwt. in weight unladen
£10


Exceeding 12 cwt. but not exceeding 1 ton in weight unladen
£16


Exceeding 1 ton but not exceeding 2 tons in weight unladen
£21


Exceeding 2 tons but not exceeding 3 tons in weight unladen
£25


Exceeding 3 tons but not exceeding 4 tons in weight unladen
£28


Exceeding 4 tons in weight unladen
£30


With an additional duty in any case if used for drawing a trailer of
£2

(6)Any vehicles other than those charged with duty under the foregoing provisions—

Not exceeding 6 horse power or electrically propelled
£6


Exceeding 6 horse power
£1 for each unit or part of a unit of horse power

(b)the unit of horse power for the purpose of duty under this Resolution shall be calculated in accordance with Regulations made by the Minister of Transport;

(c)on licences for vehicles (other than cycles and tramcars, and vehicles in respect of which an annual duty of 5s. is chargeable) taken out for any quarter of the year duty shall be charged at the rate of. thirty per centum of the full annual duty; and

(d)the abatement of duty granted in the case of motor cars used by medical practitioners or veterinary surgeons for the purpose of their professions shall cease.

STAMPS.

Receipts.

Resolved,
 That twopence shall be substituted for one penny as the stamp duty on receipts.

Scrip Certificates

Resolved,
 That twopence shall be substituted for one penny as the stamp duty on scrip certificates and similar documents.

STOCKS, MARKETABLE SECURITIES, &c.

Resolved,
That—

(a)the stamp duties charged on conveyances or transfers of stocks and marketable securities, whether on sale or whether by way of voluntary disposition inter vivos, shall be double those now chargeable; and
(b)the stamp duty charged under Section One hundred and fourteen of the Stamp Act, 1891, as extended by Section Thirty-nine of the Finance Act, 1894, and Section Five of the Finance Act, 1898, by way of composition for stamp duty chargeable on transfers of certain stocks, and the stamp duty charged under Section One hundred and fifteen of the Stamp Act, 1891, by way of composition in respect of the transfer of certain stocks and otherwise, shall be double those now chargeable; and
(c)the stamp duties charged on marketable securities transferable by delivery and on share warrants and stock certificates to bearer; and on other instruments having a like effect as such warrants or certificates, shall be double those now chargeable."

Statements as to Capital of Companies.

Resolved,
 That as from the nineteenth day of April, nineteen hundred and twenty, the ad valorem stamp duty charged on statements of the nominal capital of any corporation or company, and on statements of the increase of any such capital, and on statements of the amounts contributed by a limited partner to a limited partnership, and on statements of any increase in any such amounts, shall be at the rate of one pound instead of five shillings for every £100 or fraction of £100.

ACCIDENT AND INDEMNITY POLICIES.

Resolved,
 "That sixpence shall be substituted for one penny as the stamp duty on policies of insurance against accident and policies of insurance for any payment agreed to be made during the sickness of any person or during his incapacity from personal injury, or by way of indemnity against loss of or damage to any property, and that twenty-five pounds per centum shall be substituted for five pounds per centum as the rate of stamp duty payable under any Act by way of composition in respect of the stamp duty on such policies.

POLICIES OF SEA INSURANCE.

Resolved,
That in lieu of the stamp duties chargeable on policies of sea insurance where the premium or consideration exceeds the rate of two shillings and sixpence per cent. of the sum insured, there shall be charged the following stamp duties, that is to say:—
(a) For or upon any voyage—
where the sum insured—



s.
d.


does not exceed £250
0
3


exceeds £250 but does not exceed £500
0
6


exceeds £500 but does not exceed £750
0
9


exceeds £750 but does not exceed£1,000
1
0


exceeds £1,000 for every £500 and any fractional part of £500
0
6


For time—
where the insurance is made for any time not exceeding six months, an amount equal to three times the amount which would be payable if the insurance were made upon a voyage;
where the insurance is made for any time exceeding six months and not exceeding twelve months, six times the amount which would be payable if the insurance were made upon a voyage.

INCOME TAX.

Charge of Tax.

Resolved,
That—
(a) Income Tax shall be charged for the year beginning the sixth day of April, nineteen hundred and twenty, at the rate of six shillings in the pound; and
(b) the like provisions shall have effect with respect to the Income Tax so charged and the annual value of property as had effect with respect thereto for the year beginning the sixth day of April, nineteen hundred and nineteen.
And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913.

Super-tax.

Resolved,
That—
(a) the additional duty of Income Tax (called Super-tax) shall be charged in respect of incomes which exceed £2,000 as follows:—


In respect of the first£2,000 of the income
Nil.


In respect of the excess over £2,000—



For every pound of the first £500 of the excess
One shilling and sixpence.

For every pound of the next £500 of the excess
Two shillings.


For every pound of the next £1,000 of the excess
Two shillings and sixpence


For every pound of the next £1,000 of the excess
Three shillings.


For every pound of the next £1,000 of the excess
Three shillings and sixpence.


For every pound of the next £1,000 of the excess
Four shillings.


For every pound of the next £1,000 of the excess
Four shillings and sixpence.


For every pound of the next £12,000 of the excess
Five shillings.


For every pound of the next £10,000 of the excess;
Five shillings an d sixpence.


For every pound of the remainder of the excess
Six shillings.


(b) the like provisions shall have effect with respect to the Super-tax so charged as had effect with respect to the Super-tax charged for the year beginning the sixth day of April, nineteen hundred and nineteen.
And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913.

Alteration of Beliefs.

Resolved,
 That the present exemptions, abatements, and reliefs in respect of Income Tax (including Super-tax) shall cease, and that in lieu thereof there shall be granted such exemptions, abatements, and reliefs as Parliament may provide by any Bill of the present Session relating to finance.

DOUBLE INCOME TAX WITHIN THE BRITISH EMPIRE.

Resolved,
That—

(a) for the purpose of Income Tax the amount of any income arising in or received from any British possession or territory under His Majesty's protection shall be taken to be the gross amount before deduction or payment of any Income Tax charged directly or indirectly in respect of
150
that income in the possession or territory; and
(b) where under Rule 20 of the General Rules applicable to all the Schedules, a body of persons is entitled to deduct Income Tax from any dividend, the tax to be deducted shall in no case exceed the amount of the United Kingdom tax as reduced by the amount of any relief from that tax given in respect of Income Tax paid in a British possession or territory under His Majesty's protection.
And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913.

Excess Profits Duty.

Resolved,
That—
(a) Excess Profits Duty under Part III of the Finance (No. 2) Act, 1915, as amended or extended by any subsequent enactment, shall, unless Parliament otherwise determines, be charged for any accounting period ending on or after the fifth day of August, nineteen hundred and twenty, and before the fifth day of August, nineteen hundred and twenty-one; and
(b)Excess Profits Duty shall be an amount equal to sixty per centum instead of forty per centum of the excess profits for any accounting period commencing on or after the first day of January, nineteen hundred and twenty, or, in the case of an accounting period which has commenced before that date but ends after that date, sixty per centum instead of forty per centum of so much of the excess" profits as are apportioned to the part of the period commencing on that date; and
(c)the Excess Mineral Rights Duty under Section Forty-three of the Finance (No. 2) Act, 1915, as amended or extended by any subsequent enactment shall be an amount equal to sixty per centum instead of forty per centum of the excess rent for any accounting year commencing on or after the first day of January, nineteen hundred and twenty, or in the case of an accounting year which has commenced before that date but ends after that date sixty per centum instead of forty per centum of so much of the excess rent as is apportioned to the part of the year commencing on that date."

Corporation Profits Tax.

9.0 P.M.

Resolved,
That there shall be charged on the profits or gains arising in any period of account
which includes any time after the thirty-first day of December, nineteen hundred and nineteen, from any trade, manufacture, concern in the nature of trade, or business carried on in any place whatsoever by a corporate body incorporated by or under the laws of the United Kingdom, or carried on in the United Kingdom by a corporate body incorporated otherwise than as aforesaid, and on any income (other than any such profits or gains as aforesaid) accruing from sources in any place whatsoever in any such period of account as aforesaid to a corporate body incorporated by or under the laws of the United Kingdom, or any such income accruing from sources in the United Kingdom in any such period of account as aforesaid to a corporate body incorporated otherwise than as aforesaid, a tax of five per cent. of the profits, gains or income.

Mr. BALDWIN: I beg to move, "That the Chairman do report Progress, and ask leave to sit again."
I make this Motion in order that the last Resolution may to-morrow remain the first Order, upon which we may hang our discussion on the Budget, and in order that we may now proceed to the next business, which is the consideration of the Austrian Peace Treaty.

Question put, and agreed to.

Resolutions to be reported to-morrow; Committee report Progress; to sit again to-morrow.

TREATIES OF PEACE (AUSTRIA AND BULGARIA) [EXPENSES].

Resolution reported,
That it is expedient to authorise the payment, out of moneys to be provided by Parliament, of expenses incurred under any Act of the present Session for carrying into effect Treaties of Peace between His Majesty and certain other Powers.

Motion made and Question proposed, "That this House doth agree with the Committee in the said Resolution."

Lieut.-Commander KENWORTHY: Before we pass this Resolution, might I put it to the representative of the Foreign Office that it is extremely desirable that, in the case of Austria, the personnel of the Commissions which are being sent to carry out the different articles of the Treaty enumerated in the Roneo sheets, which is the only copy available, should be kept as low as possible. The need for this has been well exemplified in the course of the discussion on the Budget.
After what we have heard of the crushing weight which is going to be levied on individuals and enterprises, on beer, cigars, and every taxable source, it is necessary that we should try to economise as much as possible. Another reason is that the unfortunate Austrians, whom we are now feeding to the extent of £1,000,000 per month, with the Austrian kronen almost out of sight, are not in a position to pay for unnecessary officials to carry out the Treaty. I do not think the number of Commissions is excessive. The Reparation Commission appointed to squeeze the last penny out of Austria has now become a Relief Mission. I do not suggest there is any danger of that Committee being over-staffed. It consists mainly of civil servants, and at their head is Sir William Goode, who carries the confidence of this House. I refer more to the naval, military and air force missions.
May I give one example in the case of the Austrian Navy? I understand that five Admirals are being sent to disarm the Austrian Navy. You have a General sent to see the aircraft demobilised, another to see the artillery finally destroyed, another to deal with the Navy and so on, and on all these Commissions you have a high British officer, a Frenchman, an Italian, a Serb, a Roumanian, and probably a Czech as well. These Committees are not duplicated, but they are sextuplicated and multiplied many times. These officials occupy the best hotels, and they see that they have the comforts appropriate to their high rank, while the unfortunate Austrian people who are past bankruptcy have to pay the bill, and this is bound to have a bad effect. Therefore, I desire that we should not have any excess of officers on these missions, and I think they should not be looked upon more as refuges for officers who would otherwise be doing less congenial work, or would be demobilised and placed on half-pay.
I am glad to see the hon. Member for North-West Hull (Colonel Lambert Ward) in his place, because he raised this question from personal observation in Vienna. I take this opportunity of putting it to the Under Secretary of State for Foreign Affairs that we should, in our own interests and in the interests of the Austrian people in their dire state of need, keep the numbers on these Com-
missions to the lowest limit. I would suggest that instead of a British, Italian, French, and a Serbian high officer on each separate mission, that, for example, the British should take over the wireless and the naval part, and I do not know why five admirals are required. The French might look after the artillery and aircraft, and the Italian some other service, and if it is necessary to employ a lot of other officers they should be junior officers. I do not think it is necessary to have high officials on each separate Commission. I do not know whether what I suggest is practical or not, or whether our Allies will insist upon their full pound of flesh. From what I have heard from hon. Members of this House and others who have had personal experience, there is a danger of these missions being over-staffed, and it would be a saving to us if their numbers were kept down as much as possible.

The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Mr. Harms-worth): My hon. and gallant Friend has raised a question that is rather outside the range of my particular Department. I entirely agree with him that these missions in connection with the Peace Treaties should be kept as small as possible, although I submit that it is not within the competence of my Department, or indeed of His Majesty's Government, to make those arrangements between the Allies which he suggests. I do not think that it would be within the province of His Majesty's Government to suggest to the different Allies that the business should be allocated in the way which he has described. I am, however, fully in agreement that the mission should be kept as small and as inexpensive as possible, especially in the case of Austria. The situation of Austria is one which commands the universal sympathy of this House and the country as well as of the Government. I think there was some exaggeration in the account which my hon. and gallant Friend the Member for North-West Hull (Colonel L. Ward) in regard to the high life in Vienna. I have been at pains to make particular inquiries into that matter, and I think that my hon. and gallant Friend has been very largely misinformed.

Colonel WEDGWOOD: It was low life.

Mr. HARMSWORTH: That was also suggested, and there again I am in a
position to assure the House that there is very little, if anything, in the charges which he made.

Colonel LAMBERT WARD: I do not know if the hon. Member is referring to me, but I did not make any suggestions of that kind against the mission. I never had any intention of insinuating any such thing, and I do resent the hon. Gentleman attributing the suggestion to me.

Lieut.-Commander KENWORTHY: I only said that the hon. and gallant Member complained of the amount of khaki in these missions, and I remember that Mr. Speaker pulled him up for being out of order in discussing on that Vote the employment of military officers. He made no allegations, nor do I, against the conduct of these officers. He only complained of the number of them, of their high rank, and of the consequent expense.

Mr. HARMSWORTH: It is my misapprehension, and I entirely withdraw any suggestion that my hon. and gallant Friend made any charge of the kind. As far as the Foreign Office are concerned, we have very few, and only essential people, on these missions, and I can say with some confidence that is also true of the Naval and Military Departments, though, so far as they are concerned, I am not in a position to speak with full responsibility.

Colonel WEDGWOOD: As one who has recently been in Vienna, I should like to ask whether this charge falls upon the British taxpayer, or whether, nominally, it falls upon the Austrian Government, because, while our own mission there is reasonable in size, and is not so much over-staffed as the other missions, yet the impression that I got when I was there from all the people who spoke to me was that other missions were using their positions in Vienna largely to get ordinary commercial business, and that they were thoroughly misusing their position. It is extremely undesirable, not only that the British people should engage in ordinary trading concerns in Austria, but that we should countenance in any way the use by our Allies of their position in Vienna for the carrying on of trade and business, the getting of concessions, the purchasing of furniture, and all the iniquitous transactions that are going on there at the pre-
sent time. You have there an exchange where 800 krones go to the £l, as against 25 krones before the War. Consequently, everything can be bought up cheap, and, while the British Mission has in that country a very good name, on account of its abstention from these practices, I do think it advisable that we should issue a word of warning to those other countries that in misusing their position they are doing ill service, not only to their own country, but to the cause of the Allies as a whole.

Mr. HARMSWORTH: In regard to my hon. and gallant Friend's first question, I am in a position to tell him that as regards the Boundary and Plebiscite Commissions, the Allied Commission of Control, and the Reparation Commission, the expenses are ultimately recoverable from the interested States. With regard to the Mixed Arbitral Tribunal, the International Commission of the Danube and other missions, the bulk of the charge falls upon the British Government. I have not myself heard, and I do not think that my hon. and gallant Friend suggested, that any charge has been made that our British Commissioners in Vienna do engage in any kind of trade, either on their own behalf or on behalf of the Government. I have not heard of that, but, if my hon. and gallant Friend has any information, and he will bring it to my notice—

Colonel WEDGWOOD: I specifically denied it, and said that the British Mission is the only one that does not do so.

Mr. HARMSWORTH: As to the suggestion that we should make hints to foreign missions, I am afraid that I must ask my hon. and gallant Friend to excuse the Government. I do not think that falls within the province of His Majesty's Government.

Question put, and agreed to.

TREATIES OF PEACE (AUSTRIA AND BULGARIA) BILL.

Considered in Committee.

[Sir E. CORNWALL in the Chair.]

CLAUSE 1.—(Power of His Majesty to give Effect to Peace Treaties.)

(1) His Majesty may make such appointments, establish such offices, make such
Orders in Council, and do such things as appear to him to be necessary for carrying out the said Treaties, and for giving effect to any of the provisions of the said Treaties.

(2) Any Order in Council made under this Act may provide for the imposition, by summary process or otherwise, of penalties in respect of breaches of the provisions thereof, and shall be laid before Parliament as soon as may be after it is made, and shall have effect as if enacted in this Act, but may be varied or revoked by a subsequent Order in Council, and shall not be deemed to be a statutory rule within the meaning of Section one of the Rules Publication Act, 1893:
Provided that, if an Address is presented to His Majesty by either House of Parliament within the next twenty-one days on which that House has sat after any Order in Council made under this Act has been laid before it praying that the Order or any part thereof may be annulled, His Majesty in Council may annul the Order or such part thereof, and it shall thenceforth be void, but without prejudice to the validity of anything done thereunder.

(3)Any expenses incurred in carrying out the said Treaties shall be defrayed out of moneys provided by Parliament.

Lieut.-Commander KENWORTHY: I beg to move, in Sub-section (1), after the word "appointments "["His Majesty's Government may make such appointments"], to insert the words " other than the appointments of representatives to serve on the Council and on the Assembly of the League of Nations."
I need hardly say that His Majesty's Government means the Executive The Foreign Office makes these appointments, or, if not the Foreign Office, that strange machine consisting of the Prime Minister and Mr. Philip Kerr. In any case, as the Bill is now drawn, this House has no sort of say in the appointments. The ordinary appointments under an old fashioned treaty before the new and better world in which we now live were not of very great moment, but the present appointments are, and my Amendment at once draws attention to the new order of things in which I hope we are shortly to enter. It would mean that the appointment of representatives to serve on the Council and on the Assembly of the League of Nations would have to come to Parliament to be approved I think I have the sense of the House with me that that is very important indeed This is the proper place for this Amendment, because both the Treaties of Peace which we are now discussing include the Covenant of the League of Nations in full and word for word as it was
included in the German Treaty. It is true that the Member of the Council of the League of Nations who will represent His Majesty has already been appointed, but I suggest that the Assembly of the League of Nations will be the most important body. It will be the more democratic body and the more popular assembly, and to that no appointments have yet been made. It is, I submit, most desirable that these appointments should have the approval of Parliament. That will commend itself to the supporters of the idea of the League of Nations. They will be aware of the criticism which has been made that the League is a League of Officials and not at all representative of the people. Indeed, the Lord President of the Council, in one of his outbursts of cynical candour, declared that the present Council of the League of Nations is only the Peace Conference under another name. If public opinion is not reassured these appointments will go far to stultify the whole idea of the League of Nations. We know the position taken up by the Die-Hards in the American Senate. They will not have one tittle of their sovereign authority transferred to the League. A similar objection has been put forward in our own Parliament. There is a great deal in it, and I feel sure the opponents of the League of Nations will support this Amendment. I think I have made out a case for the change, and I hope the Government will accept the Amendment. It will not delay the passing of the Bill into law, because I am sure hon. Members will not object to the Report Stage being taken quickly.

Mr. HARMSWORTH: I hope my hon. and gallant Friend will not press this Amendment. He was good enough to give me notice of his intention to bring it forward, and while I sympathise very warmly with the ultimate object he has in view, I am not at all clear that such an object will be served by putting such an Amendment into the Bill. In the long run these appointments, it seems undoubted, will have to be made by the Cabinet. They are not Foreign Office appointments, and they are not in the same category as any of the other appointments mentioned in the Bill. As they must be Cabinet appointments, the Cabinet is, of course, responsible to this House, which can deal with it if the appointments are not satisfactory. My
hon. and gallant Friend referred, humorously, of course, to the League as a League of Officials, and he also stated that my right hon. Friend the Member for the City of London (Mr. Balfour) had so referred to it. As I understand, however, there is only one official of the League of Nations at the present time, and that is the Secretary-General, who was appointed by the Peace Conference in Paris with the unanimous assent of the chief Allies and the Associated Powers. There is another difficulty in the nature of my hon. and gallant Friend's Amendment. I do not see how Parliament is to register its decision in this matter. I think the House, on the whole, will be satisfied to leave these appointments to the Executive, which, after all, must be responsible for them. I had the advantage of a short conversation with the Leader of the House this afternoon on this particular point, and he also asked me to say, if I thought it necessary, that, naturally, in regard to the appointment of nominees, the utmost care would be exercised by the Government to see that the people who were appointed carried the full sympathy and concurrence of the countries concerned. Under the circumstances, I hope my hon. and gallant Friend will not press the Amendment.

Colonel WEDGWOOD: Really the Amendment is of the great possible importance. The question is whether the Assembly of the League of Nations will consist of nominees of the Governments concerned or whether they will be representatives of all the different parties in this House of Commons and in the different Parliaments. As the Treaty stands at the present time, the representatives of this country on the League of Nations will consist of simply the nominees of the Executive, and what we want is that they should be appointed just as an ordinary Select Committee is appointed by the Government with the consent of Parliament, and that they shall represent, not merely the Government side of the House, but also the Opposition side. If the representative is going to be simply a Government representative, then any change in the Government will mean a complete change in your representation on the League of Nations. What we want is that our representatives shall represent all parties in the House, because then the representation will be far more permanent than any mere Government representa-
tion. But, apart from that, the really fundamental question is whether the League of Nations is to be a Parliament of Men, the Federation of the World, or whether it is to consist of nominees of the different Executives. It seems to me the success or failure of the League of Nations depends upon our decision and upon the ultimate decision of the Government as to whether the nominations are to be made by them without the authority of Parliament or whether they shall be made with the authority of Parliament. If they are made with the authority of Parliament after a vote of this House they will be representative of all parties, they will be permanent, and they will voice on the League of Nations the views of the whole of England, instead of merely those of the Foreign Office or of the Cabinet for the time being. That is one of those really fundamental questions which may make or mar the League of Nations. I have heard the criticism up and down the country moving, perhaps, more among extremists than hon. Members opposite-that this so-called League of Nations is really only a clique of nations, simply representing the old-fashioned Governments who are anxious to carry on in the future as they have in the past. We want to see the League of Nations a real embodiment of democratic feeling in all the countries of the world, and, if it' were possible to carry this Amendment, we should have the beginning of the creation of a League of Nations of that description. It is true that, when we are dealign merely with the Austrian Bill, it is difficult to put this principle into practice, but if my hon. and gallant Friend wishes to go to a Division, in order to emphasise the essential need of democratic instead of autocratic representation on

the League of Nations, I shall certainly go into the Lobby to support him.

Mr. J. F. GREEN: I cannot help thinking that my hon. and gallant Friends opposite are making a very old and historic mistake in assuming that a legislative body and an executive body are the same. Surely it is for the Executive for the time being to decide who are to be the representatives of this country on the Council of the Assembly of the League of Nations.

Colonel WEDGWOOD: On the Council, yes.

Mr. GREEN: I speak as a warm supporter of the League of Nations, and I have just returned from Bristol, where I have been speaking in support of it. I know the objection which has just been raised by my hon. and gallant Friend the Member for Newcastle - under - Lyme (Colonel Wedgwood). It is often said by the extremists that this is a league of governments, and not a league of peoples. That might have been perfectly true before the last War, when we had three great autocratic military powers in Europe; but where are those Powers now? They are swept away, and, practically speaking, we have governments representing the people in all those countries. Where you have representative governments, and the governments represent the people, it seems to me that it is not the business of the legislative assembly but of the Government representing the people, who may be turned out by the people whenever they choose, to make these appointments, since the Government is the executive body.

Question put, " That those words be there inserted."

The Committee divided: Ayes, 40; Noes, 168.

Division No. 88.]
AYES.
[9.35 p.m.


Billing, Noel Pemberton-
Hirst, G. H.
Palmer, Charles Frederick (Wrekin)


Brace, Rt. Hon. William
Hogge, James Myles
Parkinson, John Allen (Wigan)


Bramsdon, Sir Thomas
Holmes, J. Stanley
Richardson, R. (Houghton-le-Spring)


Bromfield, William
Irving, Dan
Royce, William Stapleton


Carter, W. (Not-tingham, Mansfield)
Jones, J. J. (West Ham, Silvertown)
Smith, W. R. (Wellingborough)


Coote, Colin Reith (Isle of Ely)
Lawson, John J.
Thomas, Brig.-Gen. Sir 0. (Anglesey)


Davies, A. (Lancaster, Clitheroe)
Maclean, Nell (Glasgow, Govan)
Thomson, T. (Middlesbrough, West)


Edwards, C. (Monmouth, Bedwellty)
MacVeagh, Jeremiah
Thorne, G. R. (Wolverhampton, E.)


Elliot, Capt. Walter E. (Lanark)
Malone, Lieut.-Col. C. L. (Leyton, E.)
Wilson, W. Tyson (Westhoughton)


Entwistle, Major C. F.
Mills, John Edmund
Young, Robert (Lancaster, Newton)


Galbraith, Samuel
Morgan, Major D. Watts



Griffiths, T. (Monmouth, Pontypool)
Murray, Dr. D. (Inverness and Ross)
TELLERS FOR THE AYES.-


Grundy, T. W.
Myers, Thomas
Lieutenant-Commander Kenworthy


Guest, J. (York, W. R., Hemsworth)
Newbould, Alfred Ernest
and Colonel Wedgwood.


Hartshorn, Vernon
O'Connor, Thomas P.



NOES.


Ainsworth, Captain Charles
Harmsworth, C. B. (Bedford, Luton)
Norton-Griffiths, Lieut.-Col. Sir John


Allen, Lieut.-Colonel William James
Harris, Sir Henry Percy
Oman, Charles William C.


Atkey, A. R.
Henderson, Major V. L. (Tradeston)
Parker, James


Baird, John Lawrence
Henry, Denis S. (Londonderry, S.)
Pease, Rt. Hon. Herbert Pike


Baldwin, Stanley
Herbert, Dennis (Hertford, Watford)
Peel, Lieut.-Col. R. F. (Woodbridge)


Balfour, George (Hampstead)
Hewart, Rt. Hon. Sir Gordon
Perkins, Walter Frank


Banbury, Rt. Hon. Sir Frederick G.
Hickman, Brig.-Gen. Thomas E.
Pickering, Colonel Emil W.


Banner, Sir John S. Harmood-
Hilder, Lieut.-Colonel Frank
Pinkham, Lieut.-Colonel Charles


Barker, Major Robert H.
Hinds, John
Pollock, Sir Ernest M.


Barrie, Charles Coupar
Holbrook, Sir Arthur R.
Purchase, H. G.


Benn, Sir A. S. (Plymouth, Drake)
Hope, James F. (Sheffield, Central)
Ramsden, G. T.


Bennett, Thomas Jewell
Hope, Lt.-Col. Sir J. A. (Midlothian)
Raw, Lieutenant-Colonel N.


Borwick, Major G. O.
Hopkinson, A. (Lancaster, Mossley)
Reid, D. D.


Bowerman, Rt. Hon. Charles W.
Horne, Sir R. S. (Glasgow, Hillhead)
Remer, J B.


Brackenbury, Captain H. L.
Hotchkin, Captain Stafford Vere
Renwick, George


Breese, Major Charles E.
Howard, Major S. G.
Richardson, Alexander ('Gravesend)


Broad, Thomas Tucker
Hunter-Weston, Lieut.-Gen. Sir A. G.
Robinson, S. (Brecon and Radnor)


Burn, Col. C. R. (Devon, Torquay)
Kurd, Percy A.
Robinson, Sir T. (Lanes., Stretford)


Butcher, Sir John George
Inskip, Thomas Walker H.
Rodger, A. K.


Campbell, J. D. G.
James, Lieut.-Colonel Hon. Cuthbert
Roundell, Colonel R. F.


Campion, Lieut.-Colonel W. R.
Jameson, J. Gordon
Samuel, Samuel (W'dsworth, Putney)


Carr, W. Theodore
Jephcott, A. R.
Sanders, Colonel Sir Robert A.


Chadwick, R. Burton
Jellett, William Morgan
Scott, A. M. (Glasgow, Bridgeton)


Coates, Major Sir Edward F.
Jesson, C.
Seager, Sir William


Coats, Sir Stuart
Jodrell, Neville Paul
Seddon, J. A.


Cobb, Sir Cyril
Johnson, L. S.
Shortt, Rt. Hon. E. (N'castle-on-T.)


Cockerill, Brigadier-General G. K.
Jones, Sir Edgar R. (Merthyr Tydvil)
Smithers, Sir Alfred W.


Conway, Sir W. Martin
Jones, Henry Haydn (Merioneth)
Stanley, Lieut.-Colonel Hon. G. F.


Cory, Sir C. J. (Cornwall, St. Ives)
Jones, J. T. (Carmarthen, Llanelly)
Stephenson, Colonel H. K.


Cowan, D. M. (Scottish Universities)
Jones, William Kennedy (Hornsey)
Stewart, Gershom


Craig, Colonel Sir J. (Down, Mid)
Kidd, James
Strauss, Edward Anthony


Dalziel, Rt. Hon. Sir J. H. (Kirk'dy)
Law, Alfred J. (Rochdale)
Sturrock, J. Leng


Dawes, James Arthur
Lewis, T. A. (Glam., Pontypridd)
Sugden, W. H.


Dean, Lieut.-Commander P. T.
Lister, Sir R. Ashton
Sutherland, Sir William


Dewhurst, Lieut.-Commander Harry
Lloyd, George Butler
Sykes, Sir Charles (Huddersfield)


Doyle, N. Grattan
Locker-Lampson, Com. O. (H'tingd'n)
Terrell, George, (Wilts, Chippenham)


Edgar, Clifford B.
Lonsdale, James Rolston
Terrell, Captain R. (Oxford, Henley)


Edge, Captain William
Lort-Williams, J.
Thomson, Sir W. Mitchell- (Maryhill)


Edwards, Allen C. (East Ham, S.)
Loseby, Captain C. E.
Tryon, Major George Clement


Eyres-Monsell, Commander B. M.
Lowe, Sir Francis William
Vickers, Douglas


Fell, Sir Arthur
Lyle, C. E. Leonard
Waddington, R.


Flannery, Sir James Fortescue
Lyon, Laurance
Wallace, J.


Foreman, Henry
M'Curdy, Charles Albert
Ward, Col. J. (Stoke-upon-Trent)


Gardiner, James
M'Lean, Lieut.-Col. Charles W. W.
Ward, Col. L. (Kingston-upon-Hull)


Glyn, Major Ralph
Maddocks, Henry
Warren, Lieut.-Col. Sir Alfred H.


Goff, Sir R. Park
Maitland, Sir Arthur D. Steel-
Wild, Sir Ernest Edward


Grant, James A.
Mallalleu, F. W.
Willey, Lieut.-Colonel F. V.


Gray, Major Ernest (Accrighton)
Martin, Captain A. E.
Williamson, Rt. Hon. Sir Archibald


Green, Albert (Derby)
Matthews, David
Wills, Lieut.-Colonel Sir Gilbert


Green, Joseph F. (Leicester, W.)
Moreing, Captain Algernon H.
Winterton, Major Earl


Greenwood, William (Stockport)
Morison, Thomas Brash
Worsfold, Dr. T. Cato


Gregory, Holman
Morris, Richard
Worthington-Evans, Rt. Hon. Sir L,


Gretton, Colonel John
Murray, John (Leeds, West)
Yeo, Sir Alfred William


Gritten, W. G. Howard
Neal, Arthur



Guest, Capt. Rt. Hon. Frederick E.
Newman, Sir R. H. S. D. L. (Exeter)
TELLERS FOR THE NOES.—


Hailwood, Augustine
Nicholson, Reginald (Doncaster)
Lord Edmund Talbot and Mr.


Hancock, John George
Norris, Colonel Sir Henry G.
Dudley Ward.

Clause ordered to stand part of the Bill.

Clause 2.—(Short Title) ordered to stand part of the Bill.

Preamble ordered to stand part of the Bill.

Bill reported, without Amendment.

Motion made, and Question proposed, "That the Bill be now read the Third time."

Lieut.-Commander KENWORTHY: I shall certainly have to vote against this. I should never hold up my head again if I did not. I took the responsibility of moving the rejection of the German
Peace Treaty, and I was treated somewhat lightly by my hon. Friends. Since then, in another place, Lord Curzon has admitted that many of the Clauses of that Treaty will have to be considerably modified. I hope hon. Members will wait a few months. Our objection to these Treaties is that the whole principle on which they have been put together, especially in the case of Austria, is wrong. That principle has been that on one side of an imaginary line marked by painted posts, in other J words, a frontier, all the people are angels, and on the other side they are all devils, although they are all parts of the same country and although, in 1914, they all entered the War against
us. Take the example of the parts of Poland which were former parts of the Austrian Empire. The right hon. Gentleman (Mr. Asquith) indicted the Bulgarian people for allowing themselves to be led away by a bad King and joining against us in the war. Bulgaria was on the fence for some time. She was finally brought over on the side of the German Alliance as the result of a very powerful diplomatic mission headed by Prince Hohenlohe. He took with him the most prepossessing and best looking of the Prussian officers with whom to influence the ladies of the Bulgarian Court, and he took a trunk full of decorations and a cold million in cash with which to influence the men. But the real diplomatic work was done by an extremely able Polish diplomat attached to the Austrian Diplomatic Service. This Polish Noble is now our faithful ally, and yet it was his brains that induced the Bulgarian Court to throw in the lot of Bulgaria against the Allies. This man is allowed to keep the War Loan which he took up with his profits made out of the war. He is now actually at Dantzig negotiating with our representative with reference to Polish interests. He will presently go to attend the Peace Conference between Soviet Russia, still our Ally in theory, and Poland. This man, up to the middle of 1918, was an enemy alien. He was struggling for the success of the Austrian cause— honestly. I do not blame him at all. Now he is a faithful and devoted Ally— all in six months. What would hon. Members say if Prince Hohenlohe the Prussian, who went with him as the head of the mission, were allowed to escape his share of the reparation which Germany, we all hope, will be made to pay?
In the settlement of Europe we should have been absolutely just, and I take the strongest exception to the policy put forward, I am sorry to say, from both Front Benches. We have no enemies in Europe to-day, as Shaw says, under the age of eight years, and it is these people who suffer by our mistakes and blunders. We ought to have been absolutely just, and we ought to have allowed no questions of strategy or racial pride to enter into the delimitation of the frontiers. If that example is not sufficient, might I point to the case of Greece and Bulgaria?
Greece is getting everything—more than she deserves. What prevented King Constantine, when he had driven Venizelos into exile, when every follower of Venizelos was being beaten and hunted in the streets of Athens and Patras—what prevented Constantine, the traitor, with his German wife, who gave up his frontier fortresses to Bulgaria, from bringing Greece into the War on the side of Germany? Simply the terror of the British Fleet and the guns of the British Fleet. Nothing else. Yet because Bulgaria was away from the sea, and because that argument was not accessible to the Bulgarian Court, the Bulgarians were brought into the War against the country that in the days of Gladstone befriended them, and even created them as a State. They are treated now as beaten enemies to be crushed down. We do not wish to crush them, but the Serbs do, and Greece is treated as a spoilt darling, to have not only those parts of Bulgaria inhabited by Bulgarians, but probably parts of Asia Minor inhabited by other nationalities as well. This is what history will point to as an utterly wrong policy to pursue. What is the excuse? The Under-Secretary of State for Foreign Affairs, in his extremely able speech, excused what even he admitted was a blot in handing over the Tyrolese to the Italians. He said it was for strategical reasons.

Mr. HARMSWORTH: I did not describe it as a blot. I admitted that there were 250,000 Germans within that region, but I spoke of strategical necessity as being sometimes quite as important as self-determination.

Lieut.-Commander KENWORTHY: I thought I had quoted the hon. Member correctly as saying that it was not quite what it might be. At any rate, he excused it on the ground of strategy. In other words, in these treaties abstract right does not come in; strategy does. Boundaries are arranged for strategical reasons. There is no regard to abstract right. We deny the right of some higher power over the little pigmies who arrange these treaties and attempt to barter the lives of men. These are treaties of agnostics, and so they will be reckoned in history. Our grandchildren will laugh at the elderly generals who thought that they could preserve their frontiers by mea0ns of mountains. The next war will be fought in the air, and aeroplanes will
fly over frontiers whether they are marked by painted posts or whether the frontiers are the tops of alpine mountains. The outraged feelings of the people who have been sacrificed to strategical necessities will remain in the hearts of gallant people like the Tyro-lese, who have never yet been subdued, and who will never be subdued, and who, if this matter is not rectified, may yet plunge us or our children into another war. [HON. MEMBERS: "What about our grandchildren?"] I do not remember that the National Democratic party took part in this Debate, and I should be glad if they will allow me to have my say.

Mr. STURROCK: On a point of Order. If the hon. Member refers to me, I am not a member of the National Democratic party.

Mr. DEPUTY-SPEAKER (Mr. Whitley): I have noticed that the hon. and gallant Member (Lieut.-Commander Ken-worthy) interrupts, and he ought not to be quite so sensitive.

Lieut. - Commander KENWORTHY: Perhaps I was led away, and I withdraw at once. If the Committee pass this Bill to-night, will it preclude us later from discussing the future settlement of the Adriatic coast? We have had this discussion because it was necessary to pass the Bill. Shall we have an opportunity, if we pass the Bill, of discussing the final settlement in regard to the Adriatic? This is a matter of some importance. It has held up the settlement of the peace of the world for nearly a year, and we ought to have an opportunity of discussing it. I should also like to know whether the settlement of Albania will be brought before the House for discussion. Shall we have an opportunity of discussing that question? If we pass this Treaty with Bulgaria, shall we leave Bulgaria alone to choose her own form of government? We prevented the setting up of a republic in Bulgaria by British troops after the Armistice with Bulgaria. The Bulgarian people wished to have a republic, but that was contrary to British policy or to French policy, or some other policy, and British bayonets were used to prop up that discredited, detested dynasty of Ferdinand of Coburg, King of Bulgaria, and his people were not permitted to get rid of him. There was a glorious opportunity of getting rid of
one of these offshoots of the German Royal House who was misgoverning and oppressing one of the small peoples of Europe. But that did not suit the foreign policy of the Allies. Rightly or wrongly, I suppose the explanation was that we wished at all costs to get some sort of settled government in Bulgaria, and apparently we thought that a government from above was more settled than a government chosen by the people of Bulgaria in the form of a republic. I should like to know whether, having ratified the Peace Treaty with Bulgaria, we are going to leave the Bulgars to choose their own form of government freely, without molestation from us, or undue pressure.
In the previous Debate reference was made to the results of economic warfare between the 10 races and nationalities which previously formed the Austro-Hungarian Empire, and it was said by the Lord Privy Seal that it was impossible for us to dictate to these peoples what tariff barriers they should or should not put up between each other. We have not yet produced the Hungarian Treaty. It may have been before the Hungarian representatives, but it has not been before this House. It has not been signed or ratified. It is still in the melting pot. Would it be possible— I do not see why it should not be possible—to insist that there should be no economic barrier between Hungary and Austria? Hungary is one of the great wheat-growing countries of Europe, and from Hungary the workers of the Viennese factories received their wheat and were fed. We have an opportunity to put into the Hungarian Treaty a clause preventing economic war between Hungary and Austria. May I again make a suggestion which was made by the Noble Lord the Member for Hitchin (Lord Robert Cecil) and myself, but which was not taken up by the Lord Privy Seal, with reference to the international credits which will have to be given, and in regard to which we are making a start by the Bill which will come before the House shortly? Could not those credits be given on the condition that there is disarmament, or a reduction of armaments, rigid taxation, and good government on the part of those States which are to benefit from these international credits? Can we set an example? It is all very well our talking in the councils of the nations and advising
disarmament on the part of these small peoples, but we are spending enormous sums on armaments ourselves, although we have never been safer than we are at the present time. The sea surrounds us, our prestige is tremendous, and, as the Secretary of State for War says, the terrors of our arms make for our safety. We could well afford to reduce our armaments greatly. We could then put this into the Treaty and tell them that they will not have credits until they mend their ways and settle down to work and trade with each other.
10.0 P.M.
The argument of the hon. Baronet, the Member for Chelsea, and others was that if we defeated the Government on these treaties we should delay peace, but that would be preferable to another war, and that is what these treaties mean. It would be better to remodel these treaties now before we have another war than afterwards, and it is because I believe that, and to save the certain bloodshed and revolution in these parts of the world, that I propose to vote against these treaties and to make it quite clear that the parties with which I vote are going to remodel these treaties as soon as there is a change of Government in this country. [Laughter.] Hon. Members treat this lightly, but I may remind them that a very distinguished man (President Wilson) is reported to have said that the treaties produced so far in Europe are bad and will not be altered until there is a complete change of Government in the countries that made them. The only question is whether the dissolution and despair of the democracies, the proletariats, concerned, and the agony and suffering which these treaties will cause to them will not drive them like blind Samsons to pull down the pillars of society.

Mr. NEIL MACLEAN: I wish to join with my hon. and gallant Friend in opposing these treaties. Nine months ago we passed the German Treaty. We were told then by the Prime Minister that the conditions prevailing in Europe necessitated the rapid passing of that treaty through this House in order that Europe might become tranquil. That treaty was passed because the House took the Prime Minister at his word and believed that unless the German Treaty was passed immediately conditions in
Europe would grow very much worse than they were. That treaty was passed, and what has happened since then in Europe? Chaos and revolution all over Europe as a result of the treaty which was passed without proper examination by this House. The vicious example of the treaty with Germany is repeated in this treaty, in which we have the vicious principles that after nine months of operation have produced chaos in Europe. We talk of the conditions of chaos in other countries, but the Chancellor of the Exchequer this afternoon placed before us the financial conditions in this country, and pointed out the necessity for laying heavy burdens of taxation upon the people of this country merely because the treaties that have already been passed by this House have not brought Europe back to what might be called normal conditions, and it is only now—not during the War period, when our people came forward and made their great sacrifices—that we are beginning to realise what the actual cost of the War is, and we are beginning to protest, as we have had the landlord's chorus this afternoon when they heard that the land taxes should be repealed, though there was utter silence, except on the part of one individual who protested, when it was pointed out that it was intended to keep the Valuation Department going so that we might be able to place taxation on estates that fell to heirs through the death of the original owner.
Conditions in this country are merely the reflection of the conditions in Europe. During the whole of the last nine months we have been told how those conditions would improve. What has happened? For months past, the Government has been putting pound to pound that has been subscribed in this country. What for? To save the starving people of Austria. The very fact that you are splitting up their country and taking away from them their resources will keep them in conditions as bad as those which exist now, and it will necessitate giving them alms all the time. They will become the parochial institution of Europe, and you and other countries will have to subscribe. And all so soon after the time when you were told from recruiting platforms, from political platforms, even from the pulpits in churches and chapels, that these people were our deadly enemies and must be crushed into
the mire, some even going so far as to maintain that there were no good Austrians or Germans, not even the newly-born children. Those statements were made from public platforms and from the pulpits and in the Press—the very Press, the very politicians, the very Ministers who were denouncing these people, are now issuing appeals to this country for subscriptions to save starving Austria. Such a ridiculous position has never been known in the history of this country. The Peace Treaty in itself is a ridiculous treaty, and, as has been stated by some hon. Members on the other side, all the treaties will require to be revised. All sane opinion outside this House and sane opinion inside the House is agreed that the Treaty which is passed already with regard to Germany will require revision. General Smuts himself made that statement, and General Botha was in agreement with him.

Mr. KENNEDY JONES: When?

Mr. MACLEAN: Immediately after the Peace Treaty was signed.

Mr. JONES: Give us a date.

Mr. MACLEAN: I think it is something else you want given to you.

Mr. JONES: I want to know when General Smuts said that.

Mr. MACLEAN: I am speaking without notes. If my hon. Friend wants to know, I can refer him to the Foreign Office Vote, when I read to the House the actual statement from the document signed by General Smuts, and the date upon which it was published. I cannot carry all the dates in my head, but I make the hon. Member a fair offer. I am carrying more in my head at the present moment than he is, at any rate. Dr. Sarolea, an eminent Belgian, Belgian Consul in Edinburgh, a man who stated in a letter announcing his views, that he of all men had no reason to love the Germans, that he had lost his all in the War, that his wealth had gone, and his property had been destroyed, appealed on behalf of Europe, not on behalf of Germany, for support in restoring the conditions in Europe, and he pointed out that the terms of the Treaty must be revised. Therefore, we say to the Government with this opinion forming outside, and in the Press, and being advocated from public plat-
forms, and with the democracy of this country at large conferences with practical unanimity demanding the revision of the Peace Treaties with Germany—[HON. MEMBERS: " No, no! "]— it is an insult to ask this House to pass a Treaty which bears on it the hall mark of the vicious principles which are contained in the German Treaty already passed. I know we can be defeated by the Government rolling up their large majority on the same condition as some Members of the House already are to vote this Treaty—[HON. MEMBERS: "Withdraw!"] Withdraw what? Mr. Deputy-Speaker will know if I transgress the rules and will ask me to withdraw anything against the rules, and I prefer to abide by his decision than by the decision of some hon. Members who are here to-night. We ask that these Treaties be revised and that this Treaty to-night should, if at all possible, be amended. The Government should amend it, and by passing it they are insulting the democracy who demand its revision. This Treaty, like those already passed, will require to be revised, and hon. Members who laugh to-night and who think this is merely a joke and treat the matter lightly will realise by ever-increasing taxation placed on them that the only men in the House who have visualised the situation correctly are the Labour Members and those members of the Liberal party who took a sane outlook upon this question.

Colonel LAMBERT WARD: As certain statements, or rather misstatements, have been made in the Debate with regard to my views and as to what I said with regard to Vienna, perhaps the House will permit me to make a personal explanation. I should like to contradict the statement that I said that the British officials at Vienna were attempting to trade. I still think that the British Mission to Vienna was run in a most satisfactory way. I never heard a single suggestion from anybody there that they were attempting to trade. If they were criticised at all it was that they were not doing sufficient in that direction, and not because they were doing too much. Representatives of other nations were, I know, doing a good deal in the commercial line, but no one ever suggested that the British representatives in Austria or in Vienna were doing anything in the way of trade or anything they
should not do. I may say that my principal reason for criticising some inhabitants of Vienna was because I considered they were having a bad effect by their example of extravagance and were creating a false impression. There were a certain number of people, probably about five hundred thousand, who had money to spend, and were spending it freely in every kind of riotous extravagance, and the Austrian Government was doing nothing to prevent them doing so. The hotels are full of people spending money freely and putting up prices, and in my opinion the Austrian Government ought to stop that. Until they do take steps to stop it and to put their own house in order, it is useless our advancing them money, or people here subscribing to help them. It is impossible to help people who refuse to help themselves, and hitherto the Austrian Government, and the Viennese authorities in particular, have done nothing to help themselves. I object most strongly to the propaganda which is being advertised in this country. We see full-page advertisements of a starving woman standing amidst the ruins and holding a dead child in her arms. There are no ruins in Vienna, there are not even slums. I could point out worse slums in Mayfair than in Vienna, and the ruins are not in Vienna; the ruins are in France and Belgium, made more frequently than not by Austrian guns manned with German gunners.
Amongst the maze of misstatements which we have heard during the Debates on Vienna, two criticisms stand out predominantly. First of all, they are these, that this Peace Treaty is responsible for the dismemberment of Austria, and is causing the suffering and the misery which at present exist in Central Europe. I do not believe that if they were inquired into either of those criticisms would hold good. The misery which exists in Central Europe is not caused by the Peace Treaty, it is the direct outcome of the War. Few people, even in this country, where the democracies are supposed to be well educated, realise yet the amount of accumulated wealth which has been destroyed by five years of war. If they did realise it. I think we should hear much less talk about and much fewer demands for a higher standard of living for any or every class
of the inhabitants. The fact that the people of this country are no worse off than they were before the War is due first of all to the fact that we have won the War, and therefore our credit is to all intents and purposes unimpaired, and the shortage of money and of the necessities of life which is so apparent in Central Europe is no doubt aggravated by the fact that this country as a whole is getting more than its fair share of the necessities and the comforts which still exist in a very impoverished world, but there is no truth at all in the statements and the criticisms which have been made that the Peace Treaty is responsible for the dismemberment of the former Austrian Empire. Allied propaganda during the War undoubtedly contributed to the break up of the Austrian Empire, but then we did not win the War by such a large margin that we could afford to neglect anything that we could turn to our advantage, and we know now that one can win a war better by causing discontent amongst the civilian population than you can by defeating their armies in the field. For more than a century past the Austrian Empire has been like a charged mine, like a loaded shell. The Allied propaganda was the detonator which actuated the explosion, and once that explosion had taken place the Peace Conference at Versailles could no more put the Austrian Empire together again than they could reassemble the fragments of an exploded shell. The Austrian Empire never was a homogeneous entity. It was never anything better than an ill-assorted community of nations, which had been forced into some semblance of unity by Turkish oppression five, six or seven hundred years ago. When the danger of the Turk passed away, the tendency to disintegration began at once. The Austrian Empire, 120 years ago, was on the verge of dismemberment. The Napoleonic Wars and the rise of the French Republic checked that for a time, but for fifty years now the only two things that have held the Austrian Empire together have been the prestige of the army and the personality of the late Emperor. One is shattered and the other is dead. A common danger perhaps may force them into union again. It can never be done by Treaty. Any attempt to force countries such as Czechoslovakia, Hungary, Jugo-Slovakia, now free from Austria, into union with Austria,
again, would only lead to an immediate civil war.
The principal difficulty with which Austria is confronted now is economic. The Government, as I said before, is a monument of incapacity, and I very much fear it is corrupt. But it is the fall in the Exchange; it is the fall in the value of the Austrian currency that has caused and is aggravating so many of their difficulties. As things stand at the present time, they cannot buy anything from abroad. No one will take their money. They are not economic barriers which stand in their way; it is simply that of cash. We hear of Czecho-Slovakia having 200,000 tons of surplus sugar and refusing to sell it to Austria. That is absolutely inaccurate. They were prepared to sell that sugar to anybody for money, but they were not prepared to give it away. They were prepared to sell it for gold, but to sell it and take Austrian notes in exchange was to all intents and purposes giving it away. The Czecho-Slovakian exchange was depreciated to an extent about half as much as Austria, and it was absolutely necessary for their own economic salvation to sell what goods they had in the market, where they could either get the money or the commodities they required in exchange. From Austria they could get neither, and therefore they rightly, in my opinion, refused to give away goods, which they needed for their own economic salvation, to another country. It is the same with other commodities. They will sell, but not give away. Conditions in Austria at present are so bad that money is worthless, and the Government are making it worse by all sorts of artificial and useless restrictions. They are driving the peasantry on the borders to sell their cows to the Swiss, because they have fixed the maximum price of milk so low that it is infinitely below the cost of production itself. The industrial worker in the town is having his wages raised twenty or thirty times, and he brings out paper money to purchase goods which is utterly worthless. At present the peasant works from dawn to dusk, and in towns they have passed a law limiting the hours of labour to seven. The peasant has made up his mind and told the Government in no measured terms that he is not going to work sixteen hours a day to enable the industrial worker in
the town to work seven, and I do not think anyone can reasonably blame him
There is one very serious defect in the Peace Treaty, and that is that the amount of the indemnity has not been fixed. I cannot urge upon the Government too strongly to correct that omission at the earliest possible moment. It is impossible to expect the people to work and do their best until they know how much of the fruits of their labour they are to be allowed to keep themselves, and how much they are to give up in the form of indemnity. Until they do their best both in the factory and the field we cannot hope to see any material improvement in the economic conditions. Until that is done they will not set to and seriously work. What they need before everything, or as much as everything else, is to get the peace ratified, and then they will know where they are. They want to know-how much they are expected to pay, and they will know it when the amount is settled, and it is this I am endeavouring to impress on the Government. Once that is done there is some chance of there being an improvement in the state of affairs which at present exists in Central Europe. I give my most cordial support to the Government on the understanding that at the. very earliest moment the amount which Austria has to pay towards the indemnity is definitely decided and announced.

Mr. HARMSWORTH: I think it will suit the convenience of the House if at this stage I reply in a very few sentences to the speeches which have been made on the Third Reading. If I am exceedingly brief it will not be out of any discourtesy to hon. Members who have spoken, for in point of fact most of the points raised this evening are similar in character to those raised on the Second Reading Debate. [AN HON. MEMBER: "And not answered! "] For myself, I have very little to add to what I said the other day. I am very glad that my hon. Friend who has just sat down has had an opportunity of correcting an impression that I am afraid I created, in supposed derogation of the British Mission in Vienna. It was an entire error on my part, and I am very-glad he has had the opportunity of making the situation clear. May I address myself for one moment to the speech of the hon. Member on the Front Bench opposite (Mr. N. Maclean)? I myself find it very
difficult to follow the kind of reasoning that underlay his speech this evening. He said in one part of his speech that the ratification of the terms of the Peace Treaty was followed by chaos and revolution in Germany. Those, perhaps, are not the exact words, but that was his meaning. Surely he would not say that the chaos and revolution that have prevailed in Germany lately have had any relation whatever to the Peace Treaty?

Mr. MACLEAN: When I spoke of responsibility for these conditions, I did not mean the terms of the Treaty itself, or the wording of the Treaty. I referred to the conditions which accompanied the putting into operation of the Treaty, the economic conditions were responsible for the. feeling of unsettlement that gave rise to the attempts at revolution in various parts of the country.

Mr. HARMSWORTH: But surely the economic conditions in Germany and Austria are due to the fact that those countries have been conducting for five years a gigantic War in which they have not come off victorious. That, after all, is the main cause. The Peace Conference, as it seems to me, was confronted with an immeasurable difficulty in the state of Europe. Really, they did not create worse economic conditions. On the whole they endeavoured to correct them. The people of this country are in an advantageous position in this respect. We have heard from the Chancellor of the Exchequer to-day, and on other occasions, that we are at present economically in a more prosperous state than any of the belligerents in the late War. I wonder what the democracy of France feel with regard to the revision of the German Peace Treaty. I have studied that question, and I see the French press, and I do not read of any suggestion in France that the terms of the Peace Treaty with Germany should be revised. I think we ought to be extremely careful what we say on this question. It is all very well to assume a ' generous air, and say that we can afford to be generous, but there are other parties to this immense transaction who have suffered more than ourselves and even more than the Germans themselves. My hon. and gallant Friend the Member for Central Hull (Lieut.-Commander Ken-worthy) asked me one or two questions.
He asked whether we should be able to discuss the Adriatic settlement and Albania. Those two subjects are amongst the topics that have now come up for settlement at San Remo. I do not suppose the House will have any opportunity of discussing those questions before the settlement is announced, but we can feel quite sure that they are receiving the fullest attention.

Lieut. - Commander KENWORTHY: Shall we. by passing this Treaty, abrogate our right to discuss the settlement with those parts of the Austrian Empire not included in the Treaty?

Mr. HARMS'WORTH: I should say not, but I am not an authority on the forms of the House. A question has been raised about interfering with the form of the government in Bulgaria. I have never heard the suggestion that His Majesty's Government should interfere with the form of government suited to Bulgaria. Another suggestion made was that in framing the terms of the Hungarian Treaty we should either persuade or compel Hungary to enter into free trade relations with Austria. In the discussion the other day that point was raised, I believe, by the right hon. Gentleman the Member for Paisley (Mr. Asquith). In the first place, I observe that any compulsion on such a question would be a very serious trespass on any kind of principle of self-determination, and I cannot imagine anyone compelling them to adopt a system of tree trade.

Lieut. - Commander KENWORTHY: Are we not dictating a peace to them? We have insisted upon the principle of self-determination in the case of other countries, and why not in this instance?

Mr. HARMSWORTH: We do not over ride sovereign rights in those countries. My hon. and gallant Friend will realise that we have had a great deal of discussion in regard to the Irish people, who have very peculiar views in regard to this principle. Another suggestion made was that inasmuch as credits are being provided by the Allies and Associated Powers, and I hope by neutral Powers, for the relief of Central Europe, that the money power should be used to persuade or compel these small new States to disarm. As a matter of fact, as the Leader of the House pointed out, the Allies and Associated Powers are
making use of those credits in that way. Where, for instance, one of those States is disposed to deprive German Austria of her ligitimate trade, then the Allies have said they will not give them any credit until they have made their way in this respect. The Leader of the House stated that specifically the other day. Here, again, I would venture to remark that to compel, or to seek to compel, a Sovereiga State, however desirable the consummation might be, would be a grave infraction of the law and principle of self-determination. Indeed, I find it difficult to understand how it is that hon. Gentlemen, who set almost a superstitious value on that principle, are so swift to invade it when it suits their argument. The Allies and His Majesty's Government have been blamed for many things in connection with these extremely difficult transactions, but they would have incurred, and they would have earned, the combined condemnation of hon. Gentlemen on the other side, if they had ventured on these wild experiments in the direction of compelling Sovereign States to do things which no, doubt would be very good for them, but which they do not happen to regard with favour at the present time. I understand that there is important business to follow, and I venture, very respectfully, to ask the House to give us this Bill now.

Mr. BILLING: I have listened with considerable interest, not only to the hon. Gentleman who has just spoken, but also to the hon. and gallant Member sitting below me (Colonel L. Ward). I happened to enter the House when he was giving the reasons for the present condition in Austria, and I really thought that it was a discussion on a Bill much nearer home. He told us that the men in that country refused to work more than a certain number of hours, and he said that one of the main reasons of the trouble was that Austria was flooded with paper money. That equally applies to our own country. We are all in this world suffering from the same disease, and it is the Government of the country that, taking courage in both hands, endeavours to enforce what, in their opinion, is in the best interests of civilisation in general, which, being egoists, all naturally believe to be the policy that is best for their own country, that will eventually come out of the present
chaotic world conditions best. All these treaties suffer from one fault. Every Prime Minister and every Government that sits down and endeavours to make any terms for a world settlement has on the one hand capitalism and on the other Bolshevism, and they fall between those two alternatives.

Mr. J. JONES: It is a pity you are not Prime Minister.

Mr. BILLING: It may be that there is some truth in the hon. Gentleman's statement. No Government can exist without the capitalist principle. They must appeal to the capitalist to get their munitions of political war. They must have their party funds, and they must make a direct appeal either to the landlords or the great commercial men. They make their appeal to the large landlords by considering their interests, and they make an appeal to the nouveau riche by giving them positions of alleged honour in the State. Under these circumstances when any question of a Peace Treaty arises they have to give this matter grave consideration and they feel this. In the case of Austria and Germany we have taken power and very rightly so as victors in the War, because no matter whether we have lost the peace or not we may take unction to ourselves that we have won the War, not through political righteousness or integrity or foresight, but through the efforts of our rank and file—we have taken power to consider whether we should press Austria and Germany to pay. They may eventually pay, but it is felt that if they are pressed too hardly they may turn round and say, "It is not worth while." Even the capitalists of Austria and Germany may lose heart and there will then arise that great reactionary spirit of unrest that is passing over all the nations of the world, and it will foster Bolshevism—or, in other words, democracy gone mad. It is for this House to decide whether we shall play into the hands of capitalism and support the Government in not pressing too hardly on the countries which rightly should pay for the War. Hon. Members who were here in this House last Parliament will remember that while the War was in progress the universal feeling was that if we could insist on the strength of right Germany and Austria must pay, because, unprovoked, they threw the world into this
state of chaos and caused the sacrifice of millions of lives for their own political and commercial aggrandisement. They ought, no doubt, to pay. But then we are faced with the fact that neither Germany nor Austria can possibly pay as at present situated. They are both economically bankrupt. A wave of depression is passing over those countries. After all, Germans and Austrians, as nations, are far harder workers than we are. [HON. MEMBERS: "No, no! "] Yes; and so, too, are the Belgians and the ' French. Prior to the War, man for man, they were greater producers than we were. Anyone who has travelled in Belgium knows that before the War Belgian mechanics used to work seven days a week. Did the British mechanic work twelve hours a day? I am not suggesting that he should; I am stating the fact. But if the country had come to such a state that, unless we produced we died, then it would be simply a question that the British mechanic must work twelve hours a day—

Mr. KENNEDY JONES: May I ask, Mr. Speaker, whether the hon. Gentleman is entitled to discuss the working hours of Belgians and Germans in connection with a Treaty between Austria and this country?

Mr SPEAKER: The hon. Member is being allowed a great deal of licence.

Mr. BILLING: The point I was endeavouring to make was as to the capacity of the country, the Peace Treaty with which we are now discussing, is capable of paying or not. I suggest to the Government and to hon. Members of this House that we must not be led away by the propaganda which is appearing in the Press as to the inability of Austria to pay. I am sure there are many old ladies of both sexes who read these full-page advertisements of " Starving and destitute Austria " who, were they asked, would say, " How can she pay?" I saw a photograph in the " Sunday Pictorial " of a little dying child, which represents Austria; and they will return a Member to this Parliament pledged to betray us in our Peace Treaty. We must fight that with all our strength, and make up our minds that Germany and Austria have transgressed the law of nations, and have proved guilty in this War. The Peace
Treaty now, in the case of Germany, is being enforced with a lax hand, because—

Mr. SPEAKER: We are not now discussing Germany.

Mr. BILLING: The danger in the case of Austria is that there is a tendency in the Government to suggest that she is utterly unable to pay for the damage she has done to the world. I am confident that Austria will be able to pay. I do not think she will be able to pay to-day or to-morrow, but that she will be able to pay eventually there is no possible doubt, and we should not permit ourselves to be led aside by any false ideas. If Austria suffers, she must suffer; but I would sooner see her suffering and paying 10s. of every £ she produces, so that the Prime Minister might not be able to have an excuse to say that he cannot provide for the widows and orphans of the men who died fighting her in the interests of the freedom of the world. We are absolutely bankrupt, but we do not admit it. Our paper money stands higher, possibly, than Austria's, but there is no reason why we should give way in these matters, or why we should not be able to redeem our pledges to the men who have fought and beaten Austria, and should offer her terms of peace which are not compatible with the victory we have won or the crime she has committed. We said all these things about Austria before the War, and to-day any questions as to what terms we should offer Austria and how we should offer them find scant attention either in the country or in the House. We all concentrate now on how we ourselves are going to make good. I make this appeal to the Government that in their desire not to disturb the capitalist principle in this world, in their desire not to tax too heavily the patience or the ability of these people to whom we are now dictating—it is quite useless for the right hon. Gentleman to suggest that we are not dictating, because if we are not we ought to be, because dictators, as a rule, have the right to dictate—and to these people to whom we are now dictating terms of peace do not continue to give the capitalist point of view too much consideration. Do not be frightened by the bogey of Bolshevism which presumably will sweep through Austria in the event of making your terms
too hard or insisting on their fulfillment. There is something even worse than Bolshevism, and that is failing to apprecite the obligations which exist to the men who have fought and suffered in this War and surrendering the great principle that is involved to-day. Capitalism has had its run.

Mr. KENNEDY JONES: Is the hon. Member speaking from the point of view of a capitalist or a Labour Member?

Mr. BlLLING: I am neither a capitalist nor a Labour Member. I make this final appeal to the Government not to give

too much weight to the point of view of capitalist interests in the question of peace terms, because if they do they may yet find their effort abortive, and they may find that, not in the country they are considering, but even in this country, where the feeling of Labour is very strong in these matters, although not quite so demonstrative as it is in the nation to Which we are referring, they may breed Bolshevism.

Question put, "That the Bill be now read the Third time"

The House divided: Ayes, 156; Noes, 26.

Division No. 89.]
AYES.
[10.55 p.m.


Ainsworth, Captain Charles
Hallwood, Augustine
Oman, Charles William C.


Allen, Lieut.-Colonel William James
Hancock, John George
O'Neill, Major Hon. Robert W. H.


Atkey, A. R.
Harmsworth, C. B. (Bedford, Luton)
Parker, James


Baird, John Lawrence
Harris, Sir Henry Percy
Pease, Rt. Hon. Herbert Pike


Baldwin, Stanley
Henderson, Major V. L. (Tradeston)
Perkins, Walter Frank


Banbury, Bt. Hon. Sir Frederick G.
Henry, Denis S. (Londonderry, S.)
Pickering, Lieut.-Colonel Emil W.


Barker, Major Robert H.
Hilder, Lieut.-Colonel Frank
Pinkham, Lieut.-Colonel Charles


Benn, Sir A. S. (Plymouth, Drake)
Hinds, John
Pollock, Sir Ernest M.


Bennett, Thomas Jewell
Hohler, Gerald Fitzroy
Prescott, Major W. H.


Borwick, Major G. O.
Holbrook, Sir A. R.
Purchase, H. G.


Bowerman, Rt. Hon, Charles W.
Holmes, J. Stanley
Raw, Lieutenant-Colonel N.


Brackenbury, Captain H. L.
Hood, Joseph
Reid, D. D.


Bramsdon, Sir Thomas
Hope, James F. (Sheffield, Central)
Remer, J. R.


Breese, Major Charles E.
Hope, Lt.-Col. Sir J. A. (Midlothian)
Renwick, George


Broad, Thomas Tucker
Hopkins, John W. W.
Robinson, s. (Brecon and Radnor)


Burn, Col. C. R. (Devon, Torquay)
Hopkinson, A. (Lancaster, Mossley)
Robinson, Sir T. (Lanes., Stretford)


Butcher, Sir John George
Hotchkin, Captain Stafford Vere
Rodger, A. K.


Campbell, J. D. G.
Howard, Major S. G.
Roundell, Colonel R. F.


Campion, Lieut.-Colonel W. R.
Hunter-Weston, Lieut.-Gen. Sir A. G.
Samuel, Samuel (W'dsworth, Putney)


Carr, W. Theodore
Hurd, Percy A.
Sanders, Colonel Sir Robert A.


Chadwick, R. Burton
Inskip, Thomas Walker H.
Scott, A. M. (Glasgow, Bridgeton)


Coates, Major Sir Edward F.
James, Lieut.-Colonel Hon. Cuthbert
Seager, Sir William


Coats, Sir Stuart
Jameson, J. Gordon
Seddon, J. A.


Cobb, Sir Cyril
Jephcott, A. R.
Smith, Sir Allan M. (Croydon, South)


Cockerill, Brigadier-General G. K.
Jodrell, Neville Paul
Smithers, Sir Alfred W.


Conway, Sir W. Martin
Johnson, L. S.
Stanley, Lieut.-Colonel Hon. G. F.


Coote, Colin Reith (Isle of Ely)
Jones, Henry Haydn (Merioneth)
Stewart, Gershom


Cory, Sir C. J. (Cornwall, St. Ives)
Jones, J. T. (Carmarthen, Llanelly)
Sturrock, J. Leng


Cowan, D. M. (Scottish Universities)
Jones, William Kennedy (Hornsey)
Sugden, W. H.


Craig, Colonel Sir J. (Down, Mid)
Kidd, James
Sutherland, Sir William


Dalziel, Rt. Hon. Sir J. H. (Kirk'dy)
Lister, Sir R. Ashton
Sykes, Sir Charles (Huddersfield)


Dawes, James Arthur
Lloyd, George Butler
Terrell, George, (Wilts, Chippenham)


Dean, Lieut.-Commander P. T.
Locker-Lampson, G. (Wood Green)
Terrell, Captain R. (Oxford, Henley)


Dewhurst, Lieut.-Commander Harry
Locker-Lampson, Com. O. (H'tingd'n)
Thomas, Brig.-Gen. Sir O. (Anglesey)


Doyle, N. Grattan
Lort-Williams, J.
Thomson, F. C. (Aberdeen, South)


Edge, Captain William
Loseby, Captain C. E.
Thomson, T. (Middlesbrough, West)


Edwards, Allen C. (East Ham, S.)
Lyle, C. E. Leonard
Thomson, Sir W. Mitchell- (Maryhill)


Elliot, Capt. Walter E. (Lanark)
Lyle-Samuel, Alexander
Tryon, Major George Clement


Eyres-Monsell, Commander B. M.
Lyon, Laurance
Vickers, Douglas


Flannery, Sir James Fortescue
M'Lean, Lieut.-Col. Charles W. W.
Waddington, R.


Foreman, Henry
Mallalleu, F. W.
Ward, Col. L. (Kingston-upon-Hull)


Galbraith, Samuel
Marriott, John Arthur Ransome
Weston, Colonel John W.


Gange, E. Stanley
Matthews, David
Willey, Lieut.-Colonel F. V.


Gardiner, James
Moore-Brabazon, Lieut.-Col. J. T. C.
Wills, Lieut.-Colonel Sir Gilbert


Glyn, Major Ralph
Moreing, Captain Algernon H.
Wilson, W. Tyson (Westhoughton)


Goff, Sir R. Park
Morrison, Hugh
Winterton, Major Earl


Gray, Major Ernest (Accrington)
Murray, John (Leeds, West)
Worsfold, Dr. T. Cato


Green, Albert (Derby)
Murray, Major William (Dumfries)
Yeo, Sir Alfred William


Green, Joseph F. (Leicester, W.)
Neal, Arthur
Young, Robert (Lancaster, Newton)


Greenwood, William (Stockport)
Newman, Sir R. H. S. D. L. (Exeter)
Younger, Sir George


Gregory, Holman
Nicholson, Reginald (Doncaster)



Gretton, Colonel John
Norris, Colonel Sir Henry G.
TELLERS FOR THE AYES.—


Gritten, W. G. Howard
O'Connor, Thomas P.
Lord E. Talbot and Mr. Dudley Ward.


NOES.


Billing, Noel Pemberton-
Edwards, C. (Monmouth, Bedwellty)
Guest, J. (York, W. R., Hemsworth)


Brace, Rt. Hon. William
Entwistle, Major C. F.
Hartshorn, Vernon


Bromfield, William
Griffiths, T. (Monmouth, Pontypool)
Hirst, G. H.


Carter, W. (Nottingham, Mansfield)
Grundy, T. W.
Hogge, James Myles


Lawson, John J.
Morgan, Major D. Watts
Smith, W. R. (Wellingborough)


Lunn, William
Palmer, Charles Frederick (Wrekin)
Wedgwood, Colonel J. C.


Maclean, Nell (Glasgow, Govan)
Parkinson, John Allen (Wigan)



MacVeagh, Jeremiah
Richardson, R. (Houghton-le-Spring)
TELLERS FOR THE NOES.—


Malone, Lieut.-Col. C. L. (Leyton, E.)
Royce, William Stapleton
Lieutenant-Commander Kenworthy


Mills, John Edmund
Short, Alfred (Wednesbury)
and Mr. Myers.

Bill accordingly read the Third time, and passed.

The remaining Orders were read and postponed.

IRELAND.

DISTURBANCE, MILLTOWN MALBAY.

Motion made, and Question proposed, " That this House do now adjourn."—[Lieut.-Colonel Sir R. Sanders.]

Mr. T. P. O'CONNOR: I hope that the House will listen to me for a few minutes. I want to call attention to what I think is a most serious and most instructive incident which has recently taken place in Ireland. On the liberation of the persons who were on hunger strike there was, of course, naturally in Ireland a considerable outburst of rejoicing. If moderate gentlemen think I am wrong in calling attention to this, as they thought me wrong in calling attention to other incidents recently, I hope that they will realise that I induced and encouraged the Government to reverse their policy of refusing to release these prisoners, and in doing so averted the Government from a tragic blunder, and hon. Members will rejoice that my efforts succeeded. I hope that the House will realise that in reference to this incident, also I am endeavouring to rescue the Government from a very perilous policy with regard to the good name not only of Ireland but of England as well. On the release of these prisoners there was an outburst of rejoicing all over Ireland. That feeling reached Milltown Malbay, a small seaside village in County Clare, and there was a procession arranged. If that had taken place in England or Scotland or Wales, where there would be a police inspector entrusted to look after such matters in a perfectly rational spirit, nothing would have happened—the procession would have come and gone, there would have been speeches made, speeches possibly of a hot character but without anyone being harmed, and there might have been expressions of sympathy with Sinn Fein and an Irish Republic. But the head of the police in this case, whoever he
was, taking that panic-stricken and violent view that I am afraid is the inevitable accompaniment of the policy of coercion, took it into his head that the procession must be stopped. I know the learned Attorney-General will tell me that all processions in County Clare are illegal under D.O.R.A. That may be true technically and pedantically, but at the same time anyone having sympathy with the relief of the people of Ireland and with the relief of my hon. and learned Friend and the Leader of the House, would have ignored D.O.R.A. and would have allowed the procession to come and go. Instead of that the police authority, having immediately declared that this procession should be broken up, went to the military and called for assistance. The result was that this procession was attacked by soldiers and police. Up to this point the facts are admitted. After this I find a conflict between the statement of the Attorney-General and the statements of persons on the spot. It was stated by the Attorney-General that there was a shot fired from the crowd. I do not know as to that. The soldiers were asked by the police to fire on the crowd. It would have been a peaceful crowd but for that intervention. As a result of the firing on the crowd three people were killed and ten wounded. One of the persons killed was a man who was carrying on his back a wounded man to a place of safety. One of those wounded was a man of Irish descent who had served in the American Army and was home on vacation. The incident has created a feeling of intense indignation and bitterness. Have I to remind the House that even to this day the Peterloo massacre is a slogan among the working classes in Lancashire? Canon Hannan, the priest of the place, says that
It was hard to speak with fitting calmness and moderation of the awfully tragic circumstances under which three of his parishioners were shot down.
Then he tells the story of the incident, hut makes no mention of any attack from the crowd. He says the people were not called upon to disperse, and without giving them any fair chance of doing so the order to fire was given. The order was obeyed and three men were shot dead
and several more or less seriously wounded. So far as he knew the soldiers were not organised by volunteers or any other political organisation. The Bishop of the Diocese (Dr. Fogarty), who was unable to be present at the funeral, telegraphed these words:
Universal sorrow at slaughter of your helpless and inoffensive people. I tender my deepest sympathy to you and the friends of the victims.
The Bishop concluded by exhorting all to exercise self-control in face of provocation. I find that so strong was the feeling excited that the coffins of the victims were brought twice past the scene of the shooting, where three crosses had been erected bearing the Gaelic inscription:
 May God have mercy on the souls of those who fell on this spot, and died for Ireland.
At the funeral three thousand Volunteers attended, in order to signify their feelings. I ask the House to believe me when I say that I call attention to events like this in order to, get them to realise the truth of the argument that I have used over and over again, that the explanation of the present horrible and tragic state of things in Ireland is not that crime produces repression, but that repression produces crime. This occurrence is symptomatic of what is taking place in Ireland. I believe that in calling the attention of the House and of the people of this country to incidents like these I am doing the best service I can to this country, as well as doing my duty to Ireland, and that I am taking what may be the first step towards the restoration of order and law-abiding conditions, in place of the chaos and anarchy which exist in Ireland to-day. It is things like this which drive the people mad and make them think they are an oppressed people, when life is not safe from the action of a foolish inspector. I am sure the poor unfortunate soldiers did not act on their own initiative and of their own will, but under the authority of this foolish, stupid police inspector, which is the inevitable result of the military system everywhere. You produce a feeling of recklessness, and sometimes a feeling and desire for reprisals, in face of the crimes on the other side, and the police and soldiers get out of hand, and the result is that you have this awful condition, and a condition
which I deplore as sincerely as any man in this House.

Major O'NEILL: I think the considerations which the hon. Member who has just sat down has placed before the House should be considered also in the light of the other side of the question. The other side of the question to-day in Ireland is terribly tragic—every bit as tragic as the side which the hon. Member has put forward. If I had time, I should like to ask how many British soldiers have been attacked even in the last few days, and hours, by the population in different parts of Ireland, and how many police have been murdered in cold blood, shot from behind hedges, and otherwise dealt with by the civilian population. But I do not wish to go into those matters. I merely want to ask the right hon. Gentleman whether he can in any way amplify the information given by the Leader of the House to-day with regard to the conditions which were attached to the release of the Sinn Fein prisoners from Mountjoy prison. The right hon. Gentleman told us that a kind of parole was read over to them and they did not object to it, and that thereupon some of them were sent to hospital and some to their homes. I should like to ask the right hon. Gentleman whether they were asked to sign the parole, and whether, in fact, they refused to do so, as has been stated in the Press. When one considers the extremely difficult position of those in the South and West of Ireland who consist of a minority who are the law-abiding population, one does want to ask the Government whether they have properly considered all the different results which may happen as the result of the action which they have taken with regard to the Sinn Fein prisoners. If they are in hospital or are in their own homes, are they to be allowed to remain at large upon the kind of parole which, apparently, they themselves never signed, if it is true that they were asked to sign it? We are told that the action taken with regard to the Sinn Fein prisoners in Mountjoy Prison was based upon the action taken in the case of Alderman O'Brien. I should like to ask what is now being done with regard to Alderman O'Brien. Has he recovered? Is he still in hospital sick? If he has recovered, what is going to be done with him? Is he going to be allowed completely at large, or is he going
to be placed in prison again or put under some form of restraint or otherwise?

Lieut.-Commander KENWORTHY: Is he going to be brought to trial?

Major O'NEILL: I do not know whether his case is that of a person who has been arrested with a view to trial, or whether he has simply been arrested under the Defence of the Realm Regulations, on suspicion, on a charge for which he cannot be tried. There are a great many people, unfortunately, as things happen to be in Ireland, arrested under those conditions, and quite rightly, as I maintain, and it is just as important that they should be kept under some form of restraint as it is that people who are going to be tried should be kept under restraint. I would ask my right hon. Friend to tell us a little more, because there are many people in Ireland who wish to know what the policy of the Government is with regard to this matter.

Mr. MacVEAGH: I only rise for the purpose of expressing my regret at the attitude which has just been taken by my hon. and gallant Friend opposite (Major O'Neill), an attitude, I am sure, that his own Leader, if he were here, would not adopt. I would remind him that he should set an example against law breaking, and that it does not lie with him to make any charge.

Major O'NEILL: I make no charge

Mr. MacVEAGH: The hon. and gallant Member assisted in running guns in Ireland for the purpose of civil war, and engaged in assisting the importation of arms for the purpose of waging war against the Crown.

Major O'NEILL: I am sure the hon. Member would deprecate, as I do, entering into these matters now. All I say is that, whatever happened in the past before the War, no Ulster volunteer would ever have fired at a policeman or soldier from behind a hedge.

Mr. MacVEAGH: I do not know what the hon. and gallant Gentleman would have done with the rifles he imported from Germany before the War. Is he pre pared to admit that he was not going to use them against the forces of the Crown? Yet he gets up to-night and lectures other Irishmen—

Major O'NEILL: I was asking for information.

Mr. J. JONES: You are getting it now.

Mr. MacVEAGH: There is a limit to human endurance I know quite well that the hon. and gallant Gentleman has no desire to promote ill-feeling in Ireland. I know him well enough to be sure that his spirit is entirely different, and that is why I deplore such an intervention as he has made to-night. He would be doing much better work if he were endeavouring to promote good feeling in Ireland.

Sir C. CORY: So you might, as well as the hon. Member for the Scotland Division (Mr. T. P. O'Connor).

Mr. MacVEAGH: I would be glad if the Attorney-General could also give us a word of explanation as to why no evidence was produced at the inquest with regard to the allegation of the Lord-Lieutenant that the Lord Mayor of Cork was murdered as the result of a secret conspiracy. The Lord Lieutenant made a statement to a newspaper interviewer in which he said that the authorities had evidence that a secret meting was held at which it was decided to shoot a certain man who was found four days later, and because the Lord Mayor of Cork opposed that decision for assassination he was assassinated. The Lord Lieutenant and Assistant-Under-Secretary were asked to give evidence in proof of their statement, and both declined to come to the court. I ask why the evidence was not given in that case, and if they knew of the decision to shoot the Lord Mayor why the evidence was not produced. Some of the statements made by the Lord Lieutenant are of a most extraordinary character, and, in view of the fact that he has repudiated three newspaper interviews he gave, people are very chary of accepting his statements in Ireland to-day.

Mr. SPEAKER: The hon. Member is making an attack on the Lord Lieutenant of Ireland. He must remember that he must do it by formal Motion and not in Debate. He must put down a Motion if he desires to criticise or attack the Lord Lieutenant.

Mr. MacVEAGH: I of course bow to your ruling. I presume I am in order in asking the Attorney-General why the
Government did not produce the evidence at the inquest which they alleged.

The ATTORNEY-GENERAL for IRELAND (Mr. Denis Henry): In respect to the information asked for by the hon. and gallant Member (Major O'Neill) I may say that the Leader of the House gave all the information in the possession of the Government up till this morning as to the circumstances under which Mountjoy prisoners were released. I cannot add anything to what he said. So far as any further action is concerned, that will be a matter for consideration, and will depend on the conduct and the circumstances of the prisoners. My hon. Friend the Member for the Scotland Division (Mr. T. P. O'Conner) has raised a question in reference to an encounter that took place between civilians and a small force of military police on the night of Wednesday, 14th April. He has admitted that, technically speaking, perhaps the assemblage was illegal, but I will not go upon that technically. The fact is that at Milltown Malbay, in the County of Clare, a crowd, composed of 150 people, assembled at to light a bonfire That they were armed was proved beyond all doubt, because they were the aggressors, and the first discharge of firearms was made at the force of military and police by members of the crowd. It was in reply to the attack made upon them that the military and police themselves fired. I regret to say that this was not an isolated case in Ireland that night. There was another bonfire on the East Coast, at Balbriggan, and Sergeant Finnerty, of the Royal Irish Constabulary, was shot at, and as a result of his wounds has since died. At least ten or twelve or perhaps more shots were fired from a crowd of 150 people before any discharge of firearms was made by the military or the police in self-protection.

Mr. O'CONNOR: Was that before any attempt was made to disperse the crowd?

Mr. HENRY: I believe they were warned to disperse, but the first act of violence came from the crowd itself. The possession of firearms under these circumstances was absolutely illegal. Further, in that very part of the country, on the Sunday, within a comparatively few miles of where this incident occurred—I think my hon. Friend will bear me out when I say that the condition of Clare has been a disgrace—an attack was made on two members of the constabulary. One, a sergeant, was shot down dead on returning home from his place of worship, and the other, a constable was very seriously wounded. My hon. Friend will admit that the circumstances in Clare are not exactly the circumstances to which he has called attention in this case. They are extremely serious and grave, and it is a matter of common knowledge in Ireland that it is practically impossible in certain districts for any member of the Royal Irish Constabulary to go out after dark except at the risk of his life. The circumstances are as I have stated them. The patrol consisted of 13 men. The number of the crowd was about a hundred and fifty, and this regrettable incident entirely arose—so my information goes—from an unprovoked attack made by members of the crowd upon the patrol who were merely discharging their duty in the ordinary course.

Lieut. - Commander KENWORTHY: Will there be any inquiry?

It being Half-Past Eleven of the Clock, Mr. SPEAKER Adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at Half after Eleven o'Clock.